canoeshasafixedcostof20,000.itcost40toproduceeachcanoe.thesellingpriceis80percanoe
Calculate the cost function C(x)
Our fixed cost is 20000.
Our variable cost is 40
Cost Function Setup
The cost function is written as variable costs * number of units + fixed costs
C(x) = 40x + 20000.
Calculate the revenue function R(x)
The product sells for 80
Therefore, R(x) = 80x
Calculate the break-even point
Break-even is where C(x) = R(x)
40x + 20000. = 80x
Subtract 40x from each side of the equation:
40x + 20000. - 40x = 80x - 40x
Cancelling the 40x on the left side, we get:
40x = 20000.
Divide each side of the equation by 40
| 40x | |
| 40 |
| = |
| 20000. |
| 40 |
Cancelling 40 on the left side, we get:
| = |
| 20000. |
| 40 |
x = 500 ← This is the break-even quantity.
Calculate the break even amount
R(500) = 80(500)
Final Answer
R(500) = 40000
You have 2 free calculationss remaining
What is the Answer?
R(500) = 40000
How does the Break Even Calculator work?
Free Break Even Calculator - Given a fixed cost, variable cost, and revenue function or value, this calculates the break-even point
This calculator has 1 input.
This calculator has 1 input.
What 4 formulas are used for the Break Even Calculator?
Cost Function = C(x)
Revenue Function = R(x)
Profit Function = P(x)
Break-even is when P(x) = 0 or R(x) = C(x)
For more math formulas, check out our Formula Dossier
Revenue Function = R(x)
Profit Function = P(x)
Break-even is when P(x) = 0 or R(x) = C(x)
For more math formulas, check out our Formula Dossier
What 6 concepts are covered in the Break Even Calculator?
- break even
- the point where your total revenue (sales or turnover) equals total costs such that profit is zero
- cost
- an amount that has to be paid or spent to buy or obtain something
- fixed cost
- business expenses that are not dependent on the level of goods or services produced by the business
- profit
- The amount of money left over after paying costs/expenses
Profit = Revenue - Cost - revenue
- the money generated from normal business operations, calculated as the average sales price times the number of units sold
- variable cost
- costs that change as the quantity of the good or service that a business produces changes. V
Cost Per Unit x Total Number of Units
Example calculations for the Break Even Calculator
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