A bicycle store costs $4500 per month to operate. The store pays an average of $65 per bike. The average selling price of each

Question

3 years ago

5

bicycle is $155. How many bicycles must the store sell each month to break even?

1 answer:

maria [59] · Answer 1 · 2022-11-05T09:46:20+03:00

Answer: 50 bicycles

Step-by-step explanation:

The breakeven quantity is the amount that must be sold to bring the profit to zero.

You can use the following formula to calculate it:

= Fixed cost / Contribution margin

Fixed cost= $4,500 per month to operate

Contribution margin = Selling price - Variable cost = 155 - 65 = $90

Breakeven = 4,500 / 90

= 50 bicycles

A bicycle store costs ​$4500 per month to operate. The store pays an average of ​$65 per bike. The average selling price of each