Respuesta :
Fixed Costs ÷ (Price - Variable Costs) = Breakeven Point
$5,255 ÷ ( 2.50) = Breakeven Point
Breakeven Point =2102
Check
$3.50 * 2102 = $7357 + $5255 =$12612
$6.00 * 2102 = $12612
$12612 = $12612
The number of loaves betty's need to sell each month in order to break even is 2102
What is breakeven point?
The level of production when
The total cost of production = total revenue earned
is called breakeven point.
If earned more than breakeven point, then that extra earning will be called profit.
If earned lower than breakeven point, then that "... less than breakeven point money" will be called loss.
For this case, let we suppose that Betty manufactures 'x' amount of loaves of breads. Then,
Total cost for production of 'x' breads = Fixed cost of $5255 + Cost of making of 'x' loafs
Now cost of making of 1 loaf = $3.5
Thus, Cost of making of 'x' loafs = [tex]3.5\times x[/tex] (in dollars)
Thus, total cost for production = [tex]5255 + 3.5x[/tex] (in dollars)
(we don't write symbols like of currency generally, and understand it from context. Also, sign of multiplication is often hidden if there are non numeric symbols and numbers being multiplied are written together)
Each loaf of bread is sold in $6.
If all 'x' bread loaves are sold, then:
Total money earned from selling of bread loaves = [tex]6x[/tex]
let we suppose that for these 'x' breads,
For breakeven point, we need these two to be equal for reaching breakeven point.
Thus, we get:
[tex]6x = 3.5x + 5255\\\text{Subtracting 3.5x from both the sides}\\6x - 3.5x = 5255\\2.5x = 5255\\\\\text{Dividing both sides by 2.5}\\x = \dfrac{5255}{2.5} = 2102[/tex]
Thus, the number of loaves betty's need to sell each month in order to break even is 2102
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