Breakeven 9-20 class notes

In the button making story, we found that when you order 200 buttons, neither company gives you a better deal.  200 buttons cost $155 whether you get them from PB or from BFY.  If you get one more button over 200 from PB, you pay 15 cents more for a total of $155.15.  If you get one more button over 200 from BFY, you pay 40 cents more for a total of $155.40.  So, for an order greater than 200 buttons, PB gives you an better deal, and that is what you recommend.

In the bellringer we solved

                                       200x = 12500 +15x

The money you get from selling x buttons at 200 cents each = the cost of buying those buttons from PB.

                              x = 68

68 is the number of buttons that makes the money coming in equal the money going out.

                             $136 = $136

68 is the breakeven number of buttons.

If you sell more than the breakeven number, you make money because revenue > cost.
For 80 buttons, 200(80) = $160 and 12500 + 15(80) = $137, so you make 160 - 137 = $23

If you sell fewer than the breakeven number, you lose money because cost > revenue.

For 40 buttons, 200(40) = $80 and 12500 + 15(40) = $131, so you make 90 - 131 = negative $41 (loss)

Profit is the money you make, calculated by subtracting cost from revenue.

Homework for 9-21 is page 34, items 6 and 7.