Posted by **Rick** on Sunday, February 19, 2012 at 8:53pm.

The Oliver Company plans to market a new product. Based on its market studies, Oliver estimates that it can sell up to 4,500 units in 2005. The selling price will be $2 per unit. Variable costs are estimated to be 20% of total revenue. Fixed costs are estimated to be $6,400 for 2005. How many units should the company sell to break even?

How do I calculate the units to break even? What type of formula do I use?

- Algebra -
**Steve**, Monday, February 20, 2012 at 11:07am
revenue = units * price/unit

r = 2x for x units

var cost = .2r

fix cost = 6400

total cost c = 6400 + .2(2x)

total revenue = 2x

breakeven when cost = revenue

2x = 6400 + .4x

1.6x = 6400

x = 4000

so, at 4000 units,

revenue = 8000

cost = 6400 + .2(8000) = 8000

## Answer this Question

## Related Questions

Math - The Oliver Company plans to market a new product. Based on its market ...

CVP Analysis - Business Math - Engineering estimates show that the variable cost...

Math, mathematics of finance - I am stuck on these two math questions. If nyone ...

economics - You’re the manager of global opportunities for a U.S. manufacturer, ...

economics - a firm is planning to manufacture a new product. the sales ...

economics - a firm is planning to manufacture a new product. the sales ...

college statistic and algebra - 1.suppose that the demand forecast indicate ...

Finance - Given: Jay Letterman has just (year: 2012) become product manager for ...

college - RNO Company's market for the Model 55 has changed significantly, and ...

Break-Even Analysis - Given: Jay Letterman has just (year: 2012) become product ...