Surfer tom is going to sell his custom surfboards. he was able to rent a garage from his uncle ed for $1,200 a month, which includes utilities. he anticipates being able to sell his boards for $500 each. the raw materials (resin, foam, etc.) will cost an average of $200 for each board, and he plans to spend $60 per board to advertise them to local surfers. assuming these are all the costs and revenues, what will be surfer tom’s monthly break-even point in units? does this seem like a reasonable amount for him to produce and sell every month? show your calculations.

5 surfboards.

Yes, it is a reasonable amount that can be produced and sold every month.

Step-by-step explanation:

Rent expense  =  $ (1200)

Price of Board  = $ 500

Cost of raw materials per board  = $200

Advertisement cost per board =   $ 60

Let  break even quantity of surfboard = y

At break even, total cost = total revenue (1)

Total cost per month = 1200 + 200y +60y

                 = 1200 + 260y (2)

Total Revenue per month  = 500y(3)

Equating (2) and (3) we have :

1200 +260y = 500y

500-260y = 1200

240y = 1200

y = 1200/240

y = 5 surfboards

2^y = ln 5, or   y(ln 2) = ln 5.   solving for y,   y = (ln 5) / (ln 2).   y=5

step-by-step explanation: