Question

The Muffin House produces and sells a variety of muffins. The selling price per dozen is $15, variable costs are $9 per dozen, and total fixed costs are $4,200. How many dozen muffins must The Muffin House sell to breakeven?

Answer 1

Hello there!

Your question asks how many muffins the Muffin House needs to sell in order to breakeven

Answer: 700 Muffins

In order to find the answer to your question, we first need to gather important information from the question.

Important Information:

• Selling price/ per muffin = $15
• Variable costs (cost to make)/ per muffin = $9
• Total fixed cost = $4,200

With the information above, we can find the answer to the question.

The Muffin House spends $9 to make a muffin, but sells it for $15. So the Margin is $6 (profit).

We would only make profit from the Margin price, so we need to get the Margin price to $4,200.This means we would need to divide 4200 by 6 to get our answer. Since they want to breakeven with the fixed cost, they need to sell as much muffins for the Margin to add up to $4,200 at the end to breakeven.

$4200 \div 6=700$

When you're done solving, you should get 700.

This means that The Muffin House must sell 700 muffins in order to break even.

I hope this helps!

Best regards,

MasterInvestor