Asked by virendra kumar on Jul 22, 2024

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A graphic design studio is considering three new computers. The first model, A, costs $5000. Model B and C cost $3000 and $1000 respectively. If each customer provides $50 of revenue and variable costs are $20/customer, find the number of customers required for each model to break even.

Break Even

The point at which total revenues equal total costs, resulting in neither profit nor loss.

Variable Costs

Costs that change in proportion to the level of activity or volume of production in a business.

  • Apprehend the fundamentals of breakeven analysis and its implementation in business strategy planning.
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Emma WilkersonJul 25, 2024
Final Answer :
A: BEP = 5000/(50 - 20) = 166.6 customers
B: BEP = 3000/(50 - 20) = 100 customers
C: BEP = 1000/(50 - 20) = 33.3 customers