You run a manufacturing facility that makes roller skates. Fixed monthly cost is $50,000 in mortgage, $3,000 per employee on average in salaries (you have 40 employees) and $20,000 in other expenses. The cost of raw materials is $2 per skate, and other costs per skate average to about $1. You sell the skates for $19.95 each.

How many skates must you sell to breakeven?

Define the random variable X.

Express Total Revenue, Fixed Cost, Variable Cost, Total Cost, and Profit in terms of X.

Calculate Breakeven point.

You run a manufacturing facility that makes roller skates. Fixed monthly cost is $50,000 in mortgage, $3,000 per employee on average in salaries (you have 40 employees) and $20,000 in other expenses. The cost of raw materials is $2 per skate, and other costs per skate average to about $1. You sell the skates for $19.95 each.

You have the option of outsourcing the manufacturing, which will cost you $10 per skate, with a lower fixed cost of $90,000. At what point will you be indifferent between manufacturing yourself versus outsourcing it?