# Break even point ( urgent )

• Jun 15th 2009, 03:38 PM
diehardmath4
Break even point ( urgent )
Toys 4 u manufactures a toy that it sells for \$30 each. The variable cost per toy is \$10 and the fixed cost for this product line are \$100 000 per year .

a) what is the break even point in units?

b) what is the break even sales revenue ?
• Jun 15th 2009, 04:54 PM
Jhevon
Quote:

Originally Posted by diehardmath4
Toys 4 u manufactures a toy that it sells for \$30 each. The variable cost per toy is \$10 and the fixed cost for this product line are \$100 000 per year .

a) what is the break even point in units?

the break even point is where total cost = revenue, so the profit is zero.

can you take it from there?

Quote:

b) what is the break even sales revenue ?
well, once you do (a) this part is just \$30 times the answer
• Jun 15th 2009, 05:38 PM
diehardmath4
this is what i attempted for part a

given = MP ( market price )
VC ( variable cost )
FC ( fixed cost )
P ( profit )
q ( quantity )

MP = 30
VC = 10
FC = 100 000
P = 0

Tc = FC + VC (q )

TC = 100 000 + 10(q)

Sub in values into 1

0 = R - tc

( mp ) (q) - tc

0 - ( 10 ) (q) - tc

0 = 10q - [ 100 000 + q ]

0 = 10q -100 000 - q

100 000 = 9q

q = 11 111 . 11

i got the answer wrong but not sure where i went wrong or what i did wrong
• Jun 15th 2009, 06:08 PM
Jhevon
Quote:

Originally Posted by diehardmath4
this is what i attempted for part a

given = MP ( market price )
VC ( variable cost )
FC ( fixed cost )
P ( profit )
q ( quantity )

MP = 30
VC = 10
FC = 100 000
P = 0

Tc = FC + VC (q )

TC = 100 000 + 10(q)

Sub in values into 1

0 = R - tc

( mp ) (q) - tc

0 - ( 10 ) (q) - tc

0 = 10q - [ 100 000 + q ]

0 = 10q -100 000 - q

100 000 = 9q

q = 11 111 . 11

i got the answer wrong but not sure where i went wrong or what i did wrong

Mp = 30 you said

so Mp - Tc = 30q - (100 000 + 10q) = 0

that's what you must solve
• Jun 16th 2009, 05:52 AM
diehardmath4
so after MP - TC = 30q - (100 000 + 10q)= 0

you get MP - TC = 30Q - 100 000 - 10q

MP - TC = 20q - 100 000

when you bring the - 100 000 to the other side what happens to MP - TC ?
• Jun 16th 2009, 10:33 AM
Jhevon
Quote:

Originally Posted by diehardmath4
so after MP - TC = 30q - (100 000 + 10q)= 0

you get MP - TC = 30Q - 100 000 - 10q

MP - TC = 20q - 100 000

when you bring the - 100 000 to the other side what happens to MP - TC ?

Mp - Tc is the same as 30q - (100 000 + 10q). so forget about Mp - Tc, your goal is to find q, and so you need only concentrate on the equation

30q - (100 000 + 10q) = 0