00:01
So let's start with an equation for the total cost.
00:04
This is equal to the fixed cost, which is their investment of $37 ,000, plus the variable cost, which is 43 .25 times the number of units, which we'll call x.
00:23
Now let's look at the total revenue.
00:27
So this is equal to the amount, the price per unit, which is 67 .95, times the number of units, which is x.
00:37
So they will break even if their total cost equals their total revenue.
00:48
So then we would have $37 ,000 plus 43 .25x is equal to 67 .95x.
01:01
Okay, so 67 .95 minus 43 .25 is 24 .70.
01:09
So we have 24 .70x is equal to 37 ,000.
01:14
I'll divide by 24 .70 to get x is approximately 1 ,498 units...