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23 March, 19:31

Mansfield Pharmaceuticals markets Zipro, an antibiotic. The firm has fixed costs of $1,000,000 and variable costs of $2 per bottle of 50 tablets priced at $10 per bottle. What is the break-even volume?

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  1. 23 March, 19:53
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    Break-even volume is 125,000 bottles

    Explanation:

    The formula for break-even quantity (BEQ) is given by:

    BEQ = FC / (P - VC)

    Where:

    FC = fixed cost P = price VC = variable cost

    Plug in the numbers we got

    BEQ = 1,000,000 / (10 - 2) = 125,000

    So to break even Mansfield Pharmaceuticals needs to sell 125,000 bottles of Zipro
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Home » Business » Mansfield Pharmaceuticals markets Zipro, an antibiotic. The firm has fixed costs of $1,000,000 and variable costs of $2 per bottle of 50 tablets priced at $10 per bottle. What is the break-even volume?
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