It costs a publishing company 50,000 dollars to make books. The 50,000 is a fixed cost or a cost that cannot change. To help the publishing company sell the books, a marketing company charges 4 dollars for each book sold. If the company charges 9 dollars per book, how many books should they sell to break even?
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Given: Fixed cost of publishing books= $50,000
Variable cost= $4 per book
Revenue= $9 per book
To Find: The number of books to be sold to reach the breakeven point.
Solution:
Let the number of books to be sold be ' x '.
Total cost= $ (50,000 + 4x)
Total revenue= $ 9x
We know, at breakeven point, C(x) = R(x)
⇒50,000 + 4x = 9x
⇒50,000 = 9x - 4x
⇒5x = 50,000
⇒x = 10,000
∴ No. of books to be sold = 10,000
Answer: The company should sell 10,000 books to reach breakeven.
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