A tool manufacturer has fixed costs of $124.00 a day. It costs $1.00 to make a screwdriver. The company gets $3.00 per screwdriver sold. How many screwdrivers must be produced daily to break even?
+397 The profit of the screwdriver is \($2.00\), and we need to sell enough screwdrivers to make a profit of \($124.00\). We can solve this by doing \(\frac{124}{2} = 62\). So you need to have \(62\) screwdrivers produced.
- Daisy
+128475 Thanks, Daisy.....!!!...here's another way to see this
Break-even point is where Costs = Revenue
Let the number of screwdrivers that need to be sold = S
So...Total Costs = 124 + 1S
Total Revenue = 3S
Set these even
124 + 1S = 3S subtract 1S from both sides
124 = 2S divide both sides by 2
62 = S ⇒ 62 screwdrivers must be sold to break even
