Pete corporation produces bags of peanuts. It's fixed cost is $18,900. Each bag sells for $2.17 with a unit cost of $1.27. What is Pete's break even point?

Pete's corporation would break even when they sell 21000 bags of peanuts.

Step-by-step explanation:

Let x represent the number of bags of peanuts that Pete corporation would produce and sell to break even.

The fixed cost of production is $18,900 while the unit cost of producing a bag of peanut is $1.27. This means that the total cost of producing x bags of peanuts would be

1.27x + 18900

Each bag sells for $2.17. This means that the total revenue selling from x bags of peanuts would be

2.17x

At the point of break even, total cost of production = total revenue. Therefore,

1.27x + 18900 = 2.17x

2.17x - 1.27x = 18900

0.9x = 18900

x = 18900/0.9

x = 21000

37

step-by-step explanation: