Question

Question 4 Regrind, Inc. regrinds used typewriter platens. The cost per platen is $2.40. The fixed cost to run the grinding machine is $320 per day. If the company sells the reground platens for $7.40, how many must be reground daily to reach the 'break-even' point? A) 32 platens 10 B) 42 platens p el C) 133 platens D) 64 platens

Answer 1

Note: Break Even point is a point (either in terms of quantity or sales) at which organisation/company has neither profit nor loss.

Now, given that

fixed cost to run grinding machine is $320 per day

cost per plate is $2.40

and price of reground plate for sale is $7.40 per plate

let we reground x plates daily to reach break even point,

So as per definition of Break even point, Total cost to reground the plate = cost to run the grinding machine

(price of reground plate for sale) *x - (cost of single plate)*x=cost to run grinding machine

$7.40*x-$2.40*x=$320

x=320/(7.40-2.40)

x=320/5

x=64

Therefore , Number of required plates to reground daily is 64 (option D is correct)