Terry and Ed start a lawn mowing business and purchase the mowers and equipment for $1,300. They charge $15 for each lawn and use $2 worth of gas for each job. How many lawns must Terry and Ed mow before breaking even? (1 point) Responses 10 lawns 10 lawns 50 lawns 50 lawns 100 lawns 100 lawns 1,000 lawns
To break even, Terry and Ed need to recover the initial investment of $1,300.
For each lawn, they earn $15 and spend $2 on gas, so they earn a profit of $15 - $2 = $13 per lawn.
To recover the initial investment of $1,300, they need to mow $1,300 / $13 = 100 lawns.
Therefore, Terry and Ed must mow 100 lawns before breaking even.
To determine how many lawns Terry and Ed must mow before breaking even, here are the steps:
Step 1: Calculate the total costs.
The cost of mowers and equipment is $1,300.
Step 2: Calculate the variable costs per lawn.
The cost of gas per lawn is $2.
Step 3: Calculate the total revenue per lawn.
The charge per lawn is $15.
Step 4: Calculate the contribution margin per lawn.
The contribution margin per lawn is $15 - $2 = $13.
Step 5: Calculate the breakeven point.
Divide the total costs by the contribution margin per lawn: $1,300 / $13 = 100 lawns.
Therefore, Terry and Ed must mow 100 lawns before breaking even.
To determine the number of lawns Terry and Ed must mow before breaking even, we need to consider their costs and revenue.
Let's break down the costs first:
- They purchased mowers and equipment for $1,300.
- They use $2 worth of gas for each job.
Next, let's consider their revenue:
- They charge $15 for each lawn.
To calculate the number of lawns they need to mow before breaking even, we need to find the point where their revenue covers their costs.
The total cost per lawn can be calculated as the sum of the equipment cost ($1,300) and the gas cost ($2) per lawn:
Total cost per lawn = $1,300 + $2 = $1,302.
The revenue per lawn is $15.
The number of lawns they need to mow before breaking even can be found by dividing the total cost by the revenue per lawn:
Number of lawns to break even = Total cost per lawn / Revenue per lawn.
Number of lawns to break even = $1,302 / $15 = 86.8 lawns.
Since the number of lawns cannot be fractional, we round the answer up.
Therefore, Terry and Ed need to mow at least 87 lawns before breaking even.
So, the correct answer is not provided in the options.