canoeshasafixedcostof20,000.itcost40toproduceeachcanoe.thesellingpriceis80percanoeCalculate 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
Cancelling 40 on the left side, we get:
x = 500 ← This is the break-even quantity.
Calculate the break even amount
R(500) = 80(500)
Final Answer
R(500) = 40000
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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.
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
What 6 concepts are covered in the Break Even Calculator?
break eventhe point where your total revenue (sales or turnover) equals total costs such that profit is zerocostan amount that has to be paid or spent to buy or obtain somethingfixed costbusiness expenses that are not dependent on the level of goods or services produced by the businessprofitThe amount of money left over after paying costs/expensesProfit = Revenue - Costrevenuethe money generated from normal business operations, calculated as the average sales price times the number of units soldvariable costcosts 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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