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Posted on 2016-08-30
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What is the trick of solving these type of questions. How would i make an equation based on numbers inside the sentences?
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Question by:mustish1
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6 Comments
 
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Expert Comment

by:sdstuber
ID: 41776669
There's no "trick", it's just a matter of pulling out the pieces of information you need.

"Break even" means you make no profit, but you also have no losses.

So the total cost equals the total revenue.   (C=cost,  R=revenue)

The example breaks it down pretty well.

What are the things that make up the cost?  (fixed cost + variable cost)
 
What are the things that make up the revenue? (sales)

So, set those equal and solve for x which is the number of CDs manufactured and sold.


Can you be more specific in your question?  What part of the example you posted do you not understand?
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Author Comment

by:mustish1
ID: 41776682
What is consider the variable and why is it consider the variable in this specific equation?
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LVL 74

Expert Comment

by:sdstuber
ID: 41776685
X is the variable which represents the number of CDs manufactured and sold.

That number is the variable because that is what the question asks:
"How many CDs must be manufactured and sold for the company to break even?"
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Author Comment

by:mustish1
ID: 41776701
I don't understand how they put the final numbers together at the end of the equation. Is their another way of explaining this?
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LVL 74

Accepted Solution

by:
sdstuber earned 2000 total points
ID: 41776713
On step 5?

That's just using the equation they build in step 3 and plugging in 9600 for x.


9600 is the value they got when solving for x in step 4.
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Author Closing Comment

by:mustish1
ID: 41776763
Thank You.
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