Question 386572: Hello!
I am trying to solve the following word problem and it has me stumped.
Break Even Analysis: A small fast food restaurant invests $5,000 to produce a new food item that will sell for $3.49 each. Each item can be produced for $2.16.
a: How many items must be sold to break even?
b: How many items must be sold to make a profit of $8,500?
I know that the profit for each item is going to be $1.33, but I am not sure where to go from there.
Thanks for the help.
Denise
Answer by ewatrrr(24785)   (Show Source):
You can put this solution on YOUR website!
Hi,
Each item can be produced for $2.16, is sold at 3.49.
Yes, Profit/item = $3.49 - $2.16 = $1.33
a: How many items must be sold to break even? Invests 5,000
$5,000/1.33 = 3759.4 OR 3760 items to break even
3760*1.33 = 5000.8
b: How many items must be sold to make a profit of $8,500?
3760 + $8,500/1.33 = 3760 + 6391 = 10,151
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