Hi,
If C=45000+6.99Q and
R=9.99Q

find the new break even level when:
(i) overhead cost increases by 15%
(ii)cost increases by 1.50per item
(iii)the selling price increases to 11.99

thanx.

This looks a lot like a homework problem! :confused:

My advice on this type of problems is generally:
Read & understand the problem.
Identify which words go with which symbols and which numbers.
Identify the principles and/or equations that are important.
Solve the equations for the variable you are interested in.
Plug in the numbers
Check if the answer make sense.So, where are you having difficulty? I find that step 2 is often where students get stuck. Can you say for every number or symbol or word
"over head cost" = ____________ ( a symbol and/or number)
"9.99" = _____________________( a word and/or symbol)
"Q" = ______________________(a word and/or number)
etcIf you can get through that, then often the rest kind of falls into place. If you created the equations to solve your own problem, then this should be easy. If someone else asked you (a boss or teacher), you might ask them what they meant.

If there are one or two words or numbers you are stuck on, you might check back here.


Tim F

Hi,
If C=45000+6.99Q and
R=9.99Q

find the new break even level when:
(i) overhead cost increases by 15%
(ii)cost increases by 1.50per item
(iii)the selling price increases to 11.99

thanx.

Similar to Tim, this does look like a homework problem. It really is a fairly simple Algebra problem and quite common - the break even analysis.

It looks like your variables are
C = production cost, made up of a fixed cost (or overhead) plus a variable cost ($6.99 times the quantity made).

Q = quantity made and sold
R = revenues, the sales price times the selling price.

For the break even analysis, you set R = C and determine the Q algebraically. Then looks like you have to do it again with some different costs and prices.

Steve Prevette
City University
Richland WA