Toby's tiny toys have fixed expenses of $53,900 for the production of their tiny toys. toby's has a variable expense of $12.50 a piece for each toy they produce, and they sell their toys for $16.50 a piece. how many tiny toys do they have to sell to reach their breakeven point?

The total cost of the factory will be the sum of its variable costs and it's fixed costs. The factory has fixed costs of $53,900 and variable costs of $12.50 per unit produced. Let be the number of toy's produced by this Toby's Tiny Toys, then the total variable costs will be . From this information we can gather that the cost function for this factory is,

On the other hand, if we let be the number of toys sold, we can gather that at the selling price of 16.50, the revenue function will be ,

Toby's Tiny Toys will reach their break even point when the total costs are equal to the total revenue. At this break even point ,we have that

The company has to sell 134 750 units to break even.

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