A band is planning to market a CD. The fixed costs are $1470 and the variable costs are $4 per CD. The wholesale price of the CD will be $11. For the artist to make a profit, revenues must be greater than costs. How many CDs, x, must be sold for the band to make a profit?

Question

Rohan Glenn

Business

1 November, 20:44

A band is planning to market a CD. The fixed costs are $1470 and the variable costs are $4 per CD. The wholesale price of the CD will be $11. For the artist to make a profit, revenues must be greater than costs. How many CDs, x, must be sold for the band to make a profit?

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Answers (1)

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Darwin · Answer 1

211 CD's must be sold for them to make a profit

Explanation:

Fixed costs and variable costs times x must be set equal to the selling price x in order to find out how many CD's must be sold for a profit.

So:

1470 + 4x = 11x

1470 = 11x - 4x

1470 = 7x

x = 210

∴ 210 Cd's must be sold for them to break even as their revenue will pay for their costs of marketing. This means they have to sell 211 Cd's in order to see a profit.