Since we sell each pill for $5 and the sales are $200,000 for the break even point then we need to sell:
[tex]\frac{200000}{5}=40000[/tex]units of the product.
Now, the break even point is given by:
[tex]bp=\frac{\text{fixed cost}}{\text{ selling price-variable cost}}[/tex]Let v be the variable cost, then we havE:
[tex]\begin{gathered} 40000=\frac{40000}{5-v} \\ 5-v=\frac{40000}{40000} \\ 5-v=1 \\ v=5-1 \\ v=4 \end{gathered}[/tex]Therefore the variable cost is $4
