Question

xyz company's cost function for four months is c=500000+5q
find the break even dollar volume of sales if the selling price is 6 unit​

Answer 1

The break even of a company is when cost equals selling function. The break even of xyz company is 500000 units.

Given that:

$c=500000+5q$ --- cost function

$s = 6q$ --- selling function

The break even is when the functions are equal

i.e.

$s = q$

So, we have:

$6q=500000+5q$

Collect like terms

$6q - 5q=500000$

$q=500000$

The break even is at 500000 units

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