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21 February, 19:16

Corny and Sweet grows and sells sweet corn at its roadside produce stand. The selling price per dozen is $4.00, variable costs are $2.00 per dozen, and total fixed costs are $1,200.00. What are breakeven sales in dollars?

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  1. 21 February, 19:43
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    Answer: the breakeven sales is $2,400.

    Explanation:

    Let the number of dozens of sweet sold = P

    Other variables given include:

    Total Fixed cost = $1, 200

    Variable cost given = $2.00 of P

    =$2P

    Revenue (amount from sales) =

    =$4. 00 of P

    =$4P

    Nt: Cost = fixed cost + variable cost

    C = 1200 + 2P

    Nt: breakeven occurs when Revenue equals Cost; R=C

    Thus: 4P = 1200+2P

    4P-2P=1200

    2P = 1200. (divide sides by 2)

    P = 600

    To check for the break even sales =

    4P = 1200 + 2P

    Since P = 600

    Thus: 4P = 4 * 600 = $2400

    &

    1200 + 2P = $1200 + $2 (600)

    = (1200+1200) $

    = $2400

    Thus, the break even price is $2,400.
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