Question

sal works for a computer repair shop. he has determines that customers pay on average $150 for each computer they bring in. He pays $2000 per month in rent, and each computer he fixed requires $75 in parts and labor to fix. how many computers must sal repair in one year in order to break even?

Answer 1

Answer:

The answer is :

sal must repair 320 computers in a year to break even.

Step-by-step explanation:

The break even point in a business is the point at which the total costs and the total revenue in a business are equal.

In order to calculate sal's break even point, we will first of all calculate the total costs incurred during the business year, then using the selling price (repairing price), we will calculate how many computers will be repaired to reach the incurred cost. This is done as follows:

Rent per month = $2,000

∴ Rent for a year (12 months) = 2,000 × 12 = $2,400

Cost incurred in fixing each computer = $75

Priced charged for fixing each computer = $150

Next, since we know that sal requires $75 in parts and labor to fix a computer, we will calculate the net price charged for each computer fixed as follows:

Net price charged = Priced charged for fixing each computer - Cost incurred in fixing each computer

Net price charged = 150 - 75 = $75

Finally to calculate the break even point, we know the net income (net price charged) for each computer and the costs of rent for each year, therefore, we will divide the cost incurred by the net price charged, as follows:

break even point = cost of rent for one year ÷ net price charged

break even point = 24,000 ÷ 75 = 320 computers.

Therefore, by the time sal repairs 320 computers during the year, he must have covered the costs incurred in operations, every additional repair, becomes a profit.