Question

Mike and Kim invest $12,000 in equipment to print yearbooks for schools. Each yearbook costs $5 to print and sells for $15. How many yearbooks must they sell before their business breaks even?. . A. 800 yearbooks. . B. 1,200 yearbooks. . C. 2400 yearbooks. . D. 1,800 yearbooks

Answer 1

The answer would be B, 1,200 yearbooks. Here's why: They need to make at least $12,000 to break even. When doing the math, you won't count the $5 it costs to make the yearbook - as that is more money going out before it comes in. So you would take $12,000 (cost of equipment) divided by $10 (the profit they'd make on each sale of the yearbook) = 1,200.

Answer 2

To determine the break even number of yearbooks, equate the revenue with the total cost. Let x be the number of yearbooks sold so that the break even equation becomes,
15x = 12000 + 5x
The value of x is 1200. Therefore, the answer is letter B.