A small company can produce 500 dolls per week. The doll retails for $30. The variable costs are $7.50 per doll and fixed costs are $9,000 per week. How many dolls must be sold each week to produce a net income of $1125?

Question

Quizplus · Accepted Answer

To find the break-even point in units, we use the formula: Break-even point in units = (Fixed Costs + Desired Profit) / (Selling Price per Unit - Variable Cost per Unit). Plugging in the given values: (9000 + 1125) / (30 - 7.5) = 10125 / 22.5 = 450 dolls.

A Small Company Can Produce 500 Dolls Per Week