Points: 0 of 1
A bicycle store costs $4200 per month to operate. The store pays an average of $80 per bike. The average selling price of each bicycle is $200. 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 find the number of bicycles the store must sell to break even, we need to calculate the total fixed costs (operating costs) and the total variable costs (cost per bike).
The fixed costs per month are $4200.
The variable costs per bike are $80.
To break even, the total revenue from selling the bicycles must cover the total costs.
The revenue from selling one bicycle is $200.
Let's set up the equation:
Total revenue = Total fixed costs + Total variable costs
Total revenue = Number of bicycles sold * Revenue per bicycle
Total fixed costs = $4200
Total variable costs = Number of bicycles sold * Cost per bicycle
Setting up the equation:
Number of bicycles sold * $200 = $4200 + Number of bicycles sold * $80
Simplifying the equation:
200 * Number of bicycles sold = 4200 + 80 * Number of bicycles sold
Now we can solve for the number of bicycles sold:
200 * Number of bicycles sold - 80 * Number of bicycles sold = 4200
120 * Number of bicycles sold = 4200
Number of bicycles sold = 4200 / 120 = 35
Therefore, the store must sell 35 bicycles each month to break even.