An electronics company is planning to manufacture a new line of high-end noise r

Question

An electronics company is planning to manufacture a new line of high-end noise reduction ear buds. Fixed costs will be $132,000 and it will cost $14 to produce each pair of ear buds. The ear buds will sell for $44 a pair. Using the equations for cost C and revenue R as given below where x represents the units of product, find the break-even point for producing the new ear buds.

C(x) = fixed cost + (cost per unit produced) multiplied by x

R(x) = (price per unit sold) multiplied by x

What is the break-even point? (Type an ordered pair, but do not use commas in any individual coordinates.)

Explanation / Answer

C(x) = 132000 + 14x

R(x) = 44x

For break even,

C(x) = R(x)

132000 + 14x = 44x

(44 - 14)x = 132000

30x = 132000

x = 132000/30 = 4400

At x = 4400 units, R(x) = 44(4400) = 193600

Hence,

Break - even point: (4400, 193600)

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