The Oliver Company plans to market a new product. Based on its market studies, Oliver estimates that it can sell up to 5,500 units in 2005. The selling price will be $4 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?

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Keagan Le

2 June, 13:39

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Alicia Holt · Answer 1

4x = 6400 + 0.20 (4x)

4x = 6400 + 0.8x

4x - 0.8x = 6400

3.2x = 6400

x = 6400 / 3.2

x = 2000 <===