Solve the problem.
-A shoe company will make a new type of shoe. The fixed cost for the production will be $24,000. The variable cost will be $34 per pair of shoes. The shoes will sell for $100 for each pair. How Many pairs of shoes will have to be sold for the company to break even on this new line of shoes?
A)66 pairs
B)364 pairs
C)241 pairs
D)706 pairs

Question

Quizplus · Accepted Answer

To break even, the total cost must equal the total revenue. The break-even point in units can be found using the formula: Break-even point = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). Plugging in the given values: $24,000 / ($100 - $34) = $24,000 / $66 = 363.636. Since you can't sell a fraction of a shoe, rounding up to the nearest whole number gives 364 pairs.

Solve the Problem. -A Shoe Company Will Make a New Type of Shoe