18.10.2021

he Naturally Made Bath and Body store pays $550 a month for rent and utilities. The average cost for its products to be manufactured is about $3.00 an item. If the average price for a product sold in the store is $5.50, what will the break-even point be? Let x represent the number of products sold.
The break-even point occurs when the cost function equals the revenue function.
550 + 3.00x = 5.50x
Naturally Made needs to sell products to break even.
The cost or revenue when it sells the break-even number of products will be $
.

. 115

Faq

Mathematics
Step-by-step answer
P Answered by PhD

Using concepts of profit, revenue and cost, it is found that:

The break-even point is x = 200.The cost or revenue when it sells the break-even number of products will be $1110.

Profit is revenue subtracted by cost, that is:

P(x) = R(x) - C(x)

The costs are the fee plus the cost per item, thus:

C(x) = 500 + 3x.

The revenue is the earnings per each item sold, thus:

R(x) = 5.5x

The break-even point is when the profit is 0, that is:

R(x) = C(x)

Thus:

5.5x = 500 + 3x

2.5x = 500

x = \frac{500}{2.5}

x = 200

The break-even point is x = 200.

The cost or revenue are:

R(x) = 5.5x = 5.5(200) = 1110

The cost or revenue when it sells the break-even number of products will be $1110.

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