A company manufactures replacement parts for construction cranes. The fixed manufacturing cost is $2,400 and the variable cost per part is $5.50. Each part is sold at $8.50.
The minimum number of parts the company must sell to break even is___?
The cost to the company = $5.50 per part for x parts $2,400 manufacturing The money earned by the company = $8.80 per part for x parts For break even situation, the earnings must equal the cost: 8.80x = 5.50x + 2400 3.30x = 2400 x = 727.27 The company must sell 728 parts to break even (because 0.27 part cannot be sold)
