Solve the problem.
-A lumber yard has fixed costs of $4391.40 per day and variable costs of $0.59 per board-foot produced. Lumber sells for $1.89 per board-foot. How many board-feet must be produced and
Sold daily to break even?
A) 7443 board-feet
B) 2252 board-feet
C) 3378 board-feet
D) 1770 board-feet

Question

Quizplus · Accepted Answer

To break even, the total cost (fixed costs + variable costs) must equal total revenue. Let $x$ be the number of board-feet produced and sold. The break-even point is found by setting the total cost equal to the total revenue: $$4391.40 + 0.59x = 1.89x.$$ Solving for $x$ gives: $$1.89x - 0.59x = 4391.40,$$ $$1.3x = 4391.40,$$ $$x = \frac{4391.40}{1.3} = 3378.$$ Therefore, 3378 board-feet must be produced and sold daily to break even.

Solve the Problem. -A Lumber Yard Has Fixed Costs of $4391.40 Per Day