21
QuizMultiple Choice

Break-Even Analysis

Question 21 • FowU - Financial Math - B

A furniture manufacturer must pay $16.91 to make a certain kind of chair, which it can sell for $55.75. If the manufacturer has starting overhead costs of $18,340, not including production costs, how many chairs must it sell to realize a profit of $24,850, to the nearest chair?

Answer
A
1,112
B
918
C
775
D
640

Explanation

Each chair contributes $55.75 − $16.91 = $38.84 toward overhead and profit. The manufacturer needs $18,340 + $24,850 = $43,190 in total contribution, so $43,190 ÷ $38.84 ≈ 1,111.998. Rounded to the nearest chair, that is 1,112 chairs, choice A.

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