A producer of felt-tip pens has received a forecast of demand of 31,000 pens for the coming month from its marketing department. Fixed costs of $25,000 per month are allocated to the felt-tip operation, and variable costs are 40 cents per pen. Find the break-even quantity if pens sell for $4 each. (Round your answer to the next whole number.)

the break-even quantity is 6944

Step-by-step explanation:

Let x represent the break-even quantity.

Fixed costs of $25,000 per month are allocated to the felt-tip operation, and variable costs are 40 cents(40/100 = $0.4) per pen. This means that the total cost of producing x pens for the forth coming month would be

0.4x + 25000

if pens sell for $4 each, it means that the total revenue from selling x pens would be

4x

At the point of break even, the total cost = total revenue

Therefore,

4x = 0.4x + 25000

4x - 0.4x = 25000

3.6x = 25000

x = 25000/3.6

x = 6944 to the nearest whole number

7

step-by-step explanation:

from the figure we get,

the x axis shows   the months and,

the y-axis shows the number of satisfied customer.

each line or each cell in upward direction (y-axis) shows 500.

the appropriate scale for the y - axis is: -

a = 2000 customers

b = 4000 customers

c = 6000 customers

d = 8000 customers

e = 10000 customers

f = 12000 customers

g = 14000 customers