Village Manufacturing Village Manufacturing produces two types of products - Card Games and Puzzles. The following information is available related to each product:
60% of the products sold are Card Games and 40% are Puzzles.
Refer to the Village Manufacturing information above. If total fixed costs are $24,500, how many Puzzles need to be sold in order for the company to break even?

Question

Village Manufacturing Village Manufacturing produces two types of products - Card Games and Puzzles. The following information is available related to each product:
 60% of the products sold are Card Games and 40% are Puzzles.
Refer to the Village Manufacturing information above. If total fixed costs are $24,500, how many Puzzles need to be sold in order for the company to break even?

Quizplus · Accepted Answer

Let x be the number of puzzles sold.
Then, the number of card games sold would be 0.6x.
The total revenue would be:
Revenues = 20(0.6x) + 35x = 12x + 35x = 47x
The total costs would be:
Costs = $24,500 + $12.5(0.6x + x) = $24,500 + $18.5x
In order to break even, the revenues must equal the costs.
Therefore, we have:
47x = $24,500 + $18.5x
28.5x = $24,500
x ≈ 859.65
Since we cannot sell a fraction of a puzzle, we round up to the nearest whole number and get:
x = 860
Therefore, we need to sell 860 puzzles in order to break even.

Village Manufacturing Village Manufacturing Produces Two Types of Products -