Xyz company cost function for the next four month c=500000+5q
Find the BEdollar volume of Sales if the selling price is6 birr
To find the breakeven dollar volume of sales, we need to first determine the breakeven quantity. The quantity at which the company's costs are equal to its revenue can be found by setting the cost function equal to the revenue function.
Given:
Cost function: c = 500,000 + 5q
Selling price: 6 birr
Since revenue is equal to the selling price multiplied by the quantity sold, the revenue function is:
Revenue function: r = 6q
To find the breakeven quantity, we equate the cost and revenue functions:
500,000 + 5q = 6q
To solve for q, we subtract 5q from both sides:
500,000 = 6q - 5q
500,000 = q
Therefore, the breakeven quantity is 500,000.
To find the breakeven dollar volume of sales, we multiply the breakeven quantity by the selling price:
Breakeven dollar volume of sales = 500,000 * 6
= 3,000,000 birr