Set 10: Systems of Equations (Advanced)
Explanation
A company produces widgets. Fixed costs are $500 per day, and each widget costs $3 to produce. Widgets sell for $8 each. How many widgets must be sold to break even?
80 widgets
100 widgets
120 widgets
150 widgets
Detailed Explanation
Choice B is correct. Choice B is the correct answer. Break-even occurs when Cost = Revenue. Analysis: Let = number of widgets - Total Cost: (fixed + variable) - Total Revenue: Step 1: Set Cost = Revenue: $$$500+ 3 x = 8 x500= 5 x$x = 100 Solution: 100 widgets Verification: - Cost: - Revenue: ✓ Strategic Tip: Break-even analysis: find where revenue equals total cost (fixed + variable). Choice A is incorrect because at 80: Cost = 860, Revenue = 960 dollars (profit, past break-even). Choice D is incorrect because at 150: Cost = $950, Revenue = 1200 dollars (profit, past break-even).
Key Steps:
The correct answer is 100 widgets
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