A toy company makes "Teddy Bears". The company spends $1500 for factory expenses plus $8 per bear. The company sells each bear for $12.00 each. How many bears must this company sell in order to break even?
Set up the cost function C(b) where b is the number of bears:
C(b) = Cost per bear * b + factory expenses
C(b) = 8b + 1500
Set up the revenue function R(b) where b is the number of bears:
R(b) = Sale Price per bear * b
R(b) = 12b
Break-even is where cost equals revenue, so we set C(b) equal to R(b) and solve for b:
C(b) = R(b)
8b + 1500 = 12b
To solve for b, we type this equation into our search engine and we get:
b = 375
Set up the cost function C(b) where b is the number of bears:
C(b) = Cost per bear * b + factory expenses
C(b) = 8b + 1500
Set up the revenue function R(b) where b is the number of bears:
R(b) = Sale Price per bear * b
R(b) = 12b
Break-even is where cost equals revenue, so we set C(b) equal to R(b) and solve for b:
C(b) = R(b)
8b + 1500 = 12b
To solve for b, we type this equation into our search engine and we get:
b = 375