Question

Party trays cost $14 to make not including labor, are sold for $35. If two people work 8-hour shifts making the trays at $7 per hour, how many trays must be sold to cover all costs including labor?

Answer 1

Total cost of labor = 8 hours x $7 = $56

The cost to make party trays is $14 and sold for $35,

∴ Profit per tray = $35 - $14 = $21

Now, to know how many trays must be sold to cover all costs including labor, we divide the total cost of labour by the profit per tray, that is;

$56/$21 = 2.67 trays.