A bicycle store costs $3400 per month to operate. The store pays an average of $40 per bike. The average selling price of each bicycle is $80. How many bicycles must the store sell each month to break even?
Let's assume the number of bikes to be sold each month to break even is x.
Total cost = fixed cost + variable cost
Total cost = $3400 + ($40 * x)
Total revenue = selling price * number of bikes sold
Total revenue = $80 * x
To break even, total cost = total revenue
$3400 + ($40 * x) = $80 * x
Simplifying the equation, we get:
$3400 + $40x = $80x
Moving all the terms with x to one side, we get:
$80x - $40x = $3400
Therefore:
$40x = $3400
Dividing both sides of the equation by $40, we get:
x = $3400 / $40
Simplifying, we get:
x = 85
Therefore, the bike store must sell 85 bicycles each month to break even.