Question

A bicycle store costs ​$3500 per month to operate. The store pays an average of ​$75 per bike. The average selling price of each bicycle is ​$145. How many bicycles must the store sell each month to break​ even?

Answer 1

Answer: the store needs to sell 50 bicycles each month to break even

Step-by-step explanation:

The average selling price of each bicycle is ​$145.

When we talk of break even, we are referring to the point at which the income being accrued from a business is equal to the total cost of running the business. At this point, their is no profit and there is no loss.

From the example information given,

Total cost of running the business will be

cost of operating the bicycle store + the total amount the store pays per bike.

cost of operating the bicycle store

= ​$3500 per month

The store pays an average of ​$75 per bicycle. If the store buys x bicycles per month, then,

Total the total amount the store pays per bike = 75 × x = 75x

Total cost of running the business per month

= 3500 + 75x - - - - - - -1

The average selling price of each bicycle is ​$145. This means that the selling price for x bicycles will be

145 × x = 145x

Therefore , total income is $145x

To break even,

145x = 3500 + 75x

145x - 75x = 3500

70x = 3500

x = 3500 / 70 = 50