Company fixed cost = $10 million = $10,000,000
Variable cost per pair = $5
Company charges each pair = $15
Hence the company makes $10 profit per pair
regardless the company fixed cost and only considering the variable cost.
Let subtract the variable cost per pair from the
company charging each pair = 15 - 5 = $10
Thus the company now makes $10 per pair, and it has
to sell 1,000,000 pairs of gloves to reach the break-even point. The break-even
point refers to the point where total cost and revenue are equal.
Thus for 1,000,000 pairs, the company total earning =
10 x 1,000,000 = $10,000,000 = $10 million
