Kuldip's factory manufactures toys that sell for $29.95 each. The variable cost per toy is $11, and the total fixed costs for the month are $45,000. What is the break-even point in revenue per month?

Question

Quizplus · Accepted Answer

The break-even point is the point at which total revenue equals total costs. Total costs are fixed costs plus variable costs. Variable costs are $11 per toy, and fixed costs are $45,000 per month. So, total costs are $45,000 + $11x, where x is the number of toys produced.Total revenue is the price per toy multiplied by the number of toys produced. The price per toy is $29.95. So, total revenue is $29.95x.Setting total revenue equal to total costs, we get:$29.95x = $45,000 + $11x$18.95x = $45,000x = 2,375So, the break-even point is 2,375 toys. Multiplying this by the price per toy, we get the break-even point in revenue per month:$29.95 * 2,375 = $71,121Therefore, the correct answer is C.

Kuldip's Factory Manufactures Toys That Sell for $29