A bicycle store costs $3600 per month to operate. The store pays an average of $70 per bike. The average selling price of each bicycle is $1.10. How many bicycles must the store sell each month to break even?
The store must sell ___ bicycles each month to break even. (Type a whole number.)
To break even, the store's total revenue must equal its total expenses.
Let's denote the number of bicycles the store must sell each month to break even as x.
The store's total monthly expenses are $3600.
The store pays an average of $70 per bike, so the total cost of x bikes would be 70x.
The average selling price of each bicycle is $1.10, so the total revenue from selling x bikes would be 1.10x.
Setting the equation for the break-even point:
Total Revenue = Total Expenses
1.10x = 3600 + 70x
Simplifying the equation:
1.10x - 70x = 3600
-68.9x = 3600
x ≈ 3600 / -68.9
x ≈ -52.23
Since you can't sell a negative number of bicycles, we need to round up to the nearest whole number to find the minimum number of bikes the store must sell to break even.
The store must sell at least 53 bicycles each month to break even.