Question

A business owner pays $1,200 per month in rent and a total of $120 per hour in employee salary for each hour the store is open. On average, the store brings in $200 in net sales per hour.

Which equation can be solved to determine the break-even point if x represents the number of hours per month the store is open?

Answer 1

To determine the break-even point, the equation 1200 + 120x = 200x can be solved. The break-even point occurs when the store is open for 15 hours per month.

Step-by-step explanation:

To determine the break-even point, we need to find the number of hours per month the store needs to be open to cover its expenses.

The expenses consist of the monthly rent of $1,200 and the employee salary of $120 per hour.

The revenue per hour is $200.

To determine the break-even point, we need to find the number of hours 'x' that satisfies the equation:
1200 + 120x = 200x

Solving the equation:

Subtract 120x from both sides: 1200 = 80x

Divide both sides by 80: x = 15

The break-even point occurs when the store is open for 15 hours per month.

Answer 2

The breakeven point is that in which the total cost is just equal to the total revenue. In other words, the profit becomes zero. The revenue and cost will be given below.

(1) Total revenue = ($200)x

(2) Total cost = ($120)(x) + 1200

Equating,
200x = 120x + 1200

Solving for x gives us an answer of 3.33

Hence, the answer is 3.33.