Chapter 4, Problem 40RE

Break-even analysis. A cookware manufacturer is preparing to market a new pasta machine. The company’s fixed costs for research, development, tooling,etc., are $\text{\$243,000}$ and the variable costs are $\text{\$22}\text{.45}$ per machine. The company sells the pasta machine for $\text{\$59}\text{.95}$.

(A) Find the cost and revenue equations.

(B) Find the break-even point.

(C) Graph both equations in the same coordinate system and show the break-even point. Use the graph to determine the production levels that will result in a profit and in a loss.