Samir, a carpenter, spent $300 on specialty tools to make toy horses for children. For each horse he makes, he spends $75 on supplies.

Question

Samir, a carpenter, spent $300 on specialty tools to make toy horses for children. For each horse he makes, he
spends $75 on supplies. He charges $125 for each horse. How many horses must Samir sell in order to break even?
O 2
O 3
O 4
O 6

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Dâu 4 years 2021-08-12T15:48:44+00:00 1 Answers 109 views 0

Answers ( )

  1. Nho
    0
    2021-08-12T15:50:26+00:00
    Reply

    Given:

    Fixed cost = $300

    Variable cost = $75 on each supply

    Revenue = $125 on each horse.

    To find:

    The number of horses for break even.

    Solution:

    Let x be the number of horses.

    The fixed cost is $300 and the variable cost is $75 on each supply. So, the cost function is:

    C(x)=300+75x

    The revenue from each horse is $125. So, the revenue function is:

    R(x)=125x

    On break even, the revenue and cost are equal.

    R(x)=C(x)

    125x=300+75x

    125x-75x=300

    50x=300

    Divide both sides by 50.

    x=\dfrac{300}{50}

    x=6

    The number of horses for break even is 6.

    Therefore, the correct option is D.

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