Finite Mathematics for Business, Economics, Life Sciences and Social Sciences
Finite Mathematics for Business, Economics, Life Sciences and Social Sciences
14th Edition
ISBN: 9780134677972
Author: Barnett
Publisher: PEARSON
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Chapter 4.1, Problem 69E

Break-even analysis. A small plant manufactures riding lawn mowers. The plant has fixed costs (leases, insurance, etc.) of $ 48 , 000 per day and variable costs (labor, materials, etc.) of $ 48 , 000 per unit produced. The mowers are sold for $ 1 , 800 each. So the cost and revenue equations are

y = 48 , 000 + 1 , 400 x Cost equation y = 1 , 800 x Revenue equation

where x is the total number of mowers produced and sold each day. The daily costs and revenue are in dollars.

(A) How many units must be manufactured and sold each day for the company to break even?

(B) Graph both equations in the same coordinate system and show the break-even point. Interpret the regions between the lines to the left and to the right of the break-even point.

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