Candy bars are sold in a local store for 60 cents each. The factory has $1000 in fixed costs plus 10 cents of additional expense for each candy bar made. find the break-even point

Question

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Answer 1

The equation for cost is C=1000+0.10Q where Q is the number of candy bars produced. This shows $1000 fixed cost and $0.10 cost for each one made.

Sales S=0.60Q that is, $0.60 for each candy bar sold.

At break-even, C=S so 1000+0.10Q=0.60Q and 0.50Q=1000 so Q=1000/0.50=2000.

So 2000 candy bars have to be made and sold to break even (zero profit).