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14 May, 10:09

A toy company manufactures a certain toy at a cost of $300 per day plus $25 per toy. The company sells the toy for $35. How many toys must the company sell in one day.

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  1. 14 May, 13:18
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    30 toys to break-even in one day

    Step-by-step explanation:

    Let "x" be the number of toys the company makes in a day. The cost of the company is $ 300 per day + $ 25 per toy

    Since, the cost is $25 for one toy, the cost for x toys would be $ 25x.

    The cost $300 is the fixed cost and does not depend on how many toys are made in a day. Therefore, the total cost the company pays to make x toys in a day would be:

    Total Cost = 300 + 25x

    The company sells toy for $ 35 each. So x toys would be sold in $ 35x. Hence, total revenue/sales would be:

    Total Sales = $ 35x

    In order to break-even, the total cost in one day must be equal to total sales of the day i. e.

    Total Cost = Total Sales

    300 + 25x = 35x

    300 = 10x

    x = 30

    This means, if the company makes and sells 30 toys it would break-even i. e. no loss no profit. For getting profit, the company had to sale more than 30 toys in a day.
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