Break-Even Analysis

The table below contains price-demand and total cost data for the production of treadmills, where p is the wholesale price (in dollars) of a treadmill for an annual demand of x treadmills, and C is the total cost (in dollars) of producing x treadmills.

X P($) C($) 2,910 1,450 3,634,000 3,415 1,275 3,782,000 4,645 1,123 4,185,000 5,330 918 4,290,000

Use this data to find a linear regression equation for price-demand data, using x as the independent variable: p=ax+b

where a is rounded to 1 decimal place and b is rounded to the nearest integer.

Use this data to find a linear regression model for the cost data, using x as the independent variable:

C(x)=cx+d

where c is rounded to the nearest integer and d is rounded to the nearest 10,000.

Use these linear regression models to answer questions

Estimate the fixed costs. Round to the nearest $10,000.

$

Estimate the variable cost per treadmill. Round to the nearest dollar.

$ per treadmill produced

There are two break-even points. Find the smaller production level where the company breaks even. Round to the nearest treadmill.

treadmills