The fixed cost to set up a manufacturing business for plastic pink flamingosis $2184. in addition, East Flamingo cost $8 in materials to produce. The least number of flamingos that a manufacturer must sell at $14 a piece to break even on cost is
cost = 2184 + 8 f
revenue = 14 f
when does 14 f = 2184 + 8f ?
or
6 f = 2184
The options for this answer is
a) 100
b) 156
c) 273
d) 312
e) 364
Well, well, well, looks like we've got a flamingo business in the works! Let's crunch some numbers, shall we?
To calculate the break-even point, we need to consider the fixed cost and the variable cost per unit.
The fixed cost to set up the business is $2184. Now, the variable cost is given as $8 per flamingo.
To find out how many flamingos need to be sold to break even, we'll divide the fixed cost by the difference between the selling price and the variable cost:
Break-even point = Fixed cost / (Selling price - Variable cost)
Break-even point = $2184 / ($14 - $8)
Break-even point = $2184 / $6
Break-even point = 364
So, the manufacturer must sell at least 364 plastic pink flamingos at $14 a piece to break even. That's quite the flock, huh?
To find the least number of flamingos that the manufacturer must sell to break even on cost, we need to consider the fixed cost and the variable cost.
Step 1: Calculate the variable cost per flamingo
The variable cost per flamingo is given as $8.
Step 2: Calculate the selling price per flamingo
The selling price per flamingo is given as $14.
Step 3: Calculate the total cost
The total cost is the sum of the fixed cost and the variable cost per flamingo. Hence,
Total cost = Fixed cost + Variable cost per flamingo
Total cost = $2184 + $8 = $2192
Step 4: Calculate the number of flamingos needed to break even
The number of flamingos needed to break even is given by the equation:
Number of flamingos = Total cost / Selling price per flamingo
Number of flamingos = $2192 / $14
Number of flamingos = 156.57
Since we cannot sell a fraction of a flamingo, the manufacturer would have to sell at least 157 flamingos to break even on costs.
To determine the least number of flamingos that the manufacturer must sell to break even on cost, we need to calculate the break-even point by dividing the fixed costs by the difference between the selling price and variable cost per unit.
Let's break down the information given:
Fixed cost (setup cost): $2184
Variable cost per unit (East Flamingo cost): $8
Selling price per unit: $14
The formula to calculate the break-even point is:
Break-even quantity = Fixed cost / (Selling price - Variable cost per unit)
Plugging in the values from the given information:
Break-even quantity = $2184 / ($14 - $8)
Simplifying further:
Break-even quantity = $2184 / $6
Dividing:
Break-even quantity = 364
Therefore, the manufacturer must sell at least 364 plastic pink flamingos at $14 each to break even on costs.