The oliver company plans to market a new product. based on its market studies, oliver estimates that it can sell up to 5,500 units in 2005. the selling price will be $7 per unit. variable costs are estimated to be 40% of total revenue. fixed costs are estimated to be $6,300 for 2005. how many units should the company sell to break even?

For the Oliver Company to break even, the total revenue must equal the sum of the variable costs and the fixed cost. Mathematically, this can be represented as: Total revenue = 0.4*(Total revenue) + (Fixed Costs) Let the number of units sold be x. then, 7*x = 0.4*(7*x) + 6300 Thus, x = 6300/(0.6*7) = 1500 units. Thus the company will have to sell 1500 units to break even.

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