A business's "break-even point" is the point at which revenue (sales) equals expenses. When a company breaks even, no profit is being made, but the company is not losing any money either. Suppose a manufacturer buys materials for producing a particular item at a cost of $4.85 per unit and has fixed monthly expenses of $11,625 related to this item. The manufacturer sells this particular item to several retailers for $9.50 per unit. How many units must the manufacturer sell per month to reach the break-even point for this item?
A. 810
B. 1,225
C. 2,100
D. 2,500
Answer:D
A business's "break-even point" is the point at which revenue (sales) equals expenses. When a company breaks even, no profit is being made, but the company is not losing any money either. Suppose a manufacturer buys materials for producing a particular item at a cost of $4.85 per unit and has fixed monthly expenses of $11,625 related to this item. The manufacturer sells this particular item to several retailers for $9.50 per unit. How many units must the manufacturer sell per month to reach the break-even point for this item?
A. 810 B. 1,225 C. 2,100 D. 2,500
Explanation: D