A bicycle store costs $3600 per month to operate. The store pays an average of $35 per bike. The average selling price of each bicycle is $75. How many bicycles must the store sell each month to break even?
The store must sell (Type a whole number.) bicycles each month to break even.
To break even, the store's total revenue needs to be equal to its total cost.
Let's assume the number of bicycles the store needs to sell to break even is "x".
The total revenue from selling "x" bicycles can be calculated as:
Total Revenue = Selling Price per bike * Number of bikes sold
Since each bicycle is sold at an average price of $75, the total revenue will be:
Total Revenue = $75 * x
Now let's calculate the total cost:
Total Cost = Fixed cost + (Variable cost per bike * Number of bikes sold)
Given that the fixed cost is $3600 per month and the variable cost per bike is $35, the total cost will be:
Total Cost = $3600 + ($35 * x)
To break even, the total revenue must be equal to the total cost:
$75 * x = $3600 + ($35 * x)
Simplifying this equation, we get:
$75x - $35x = $3600
$40x = $3600
x = $3600 / $40
x = 90
Therefore, the store must sell 90 bicycles each month to break even.