# Break even point and profit

• Jun 16th 2009, 12:04 PM
diehardmath4
Break even point and profit
Ingrid processes and bottles jam in her home based business. Her fixedcosts are \$250 per month and the variable cost per jar is \$1.20. She sells the jam to local grocery stores for \$3.20 each

a) how many jars must she sell per year to break even?

b) what will be her profit if she sells 3000 jars in a year?
• Jun 16th 2009, 03:44 PM
WWTL@WHL
Quote:

Originally Posted by diehardmath4
Ingrid processes and bottles jam in her home based business. Her fixedcosts are \$250 per month and the variable cost per jar is \$1.20. She sells the jam to local grocery stores for \$3.20 each

a) how many jars must she sell per year to break even?

b) what will be her profit if she sells 3000 jars in a year?

This problem is similar to the one here: http://www.mathhelpforum.com/math-he...nt-urgent.html

For (a)

The fixed cost is 250. The variable cost is 1.2x, where x is the quantity of the good. Since the price is 3.2, the total revenue will be 3.2x.

Break even point: Where total revenue = total cost

i.e. where 3.2x = 250 + 1.2x

(solve for x)

For (b)

Profit = Total revenue - Total cost...

Profit = 3.2x - (250 + 1.2x)

let x=3000...and what do you get?
• Jun 20th 2009, 12:40 PM
diehardmath4
bear with me I"m still learning break even point analysis