Exercise on finding the equilibrium point using the graphical method
📈📉 Learn how to calculate the financial break-even point with this step-by-step solved example. To graph the break-even point, you need to know the total revenue and total cost functions.
EXERCISE: Mary Williams, owner of Williams Products, is evaluating the possibility of introducing a new product line. After studying the production process and the costs of raw materials and new equipment, Williams has estimated that the variable costs per unit produced and sold would be $2, and that the annual fixed costs would be $1,000. If the selling price were set at $4 per unit, how many units would Williams have to produce and sell to reach the break-even point?
Bibliography: Operations Management. Eighth Edition. KRAJEWSKI, LEE; RITZMAN, LARRY; MALHOTRA, MANOJ
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