Given a cost function of C(x)=125x+1500
and a revenue function of R(x)=1500x-1000,
calculate the break-even point
Calculate the break-even point
Break-even is where C(x) = R(x)
125x+1500 = 1500x-1000
Subtract 125x from each side of the equation:
125x + 1500 - 125x = 1500x - 1000 - 125x
Cancelling the 125x on the left side, we get:
1375x - 1000 = 1500
Now add 1000 to each side:
1375x - 1000 + 1000 = 1500 + 1000
Cancelling the 1000 on the left side, we get:
1375x = 2500
Divide each side of the equation by 1375
| 1375x | |
| 1375 |
| = |
| 2500 |
| 1375 |
Cancelling 1375 on the left side, we get:
| = |
| 2500 |
| 1375 |
x = 1.8181818181818 ← This is the break-even quantity.
Calculate the break even amount
R(1.8181818181818) = 1500(1.8181818181818) - 1000
Final Answer
R(1.8181818181818) = 1727.2727272727
Test Your Knowledge?
- When cost equals revenue, what do we call that?
What is the Answer?
R(1.8181818181818) = 1727.2727272727
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)
Revenue Function = R(x)
Profit Function = P(x)
Break-even is when P(x) = 0 or R(x) = C(x)
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
