Question

Your family opens a small buffet restaurant. They spend $5000 to buy new dining tables and kitchen supplies. They spend $200 per day on food and utilities. They charge $15 per guest for an all you can eat dinner buffet. If they serve 12 guests a night, how long until they break even?

Answer 1

They never break even.

Explanation:

Number of days: x

Expenses for x days:

Fixed cost: $5000

Cost per day: $200

Cost for x days: 200x

Income for x days:

12 × $15 × x = 180x

Number of days: x

Total expenses = Total income

200x + 5000 = 180x

Just the daily expense of $200 on food and utilities is greater than the daily income of $180. Then there is the additional initial expense of $5,000, so they will never break even. They start by having an expense of $5,000, and each day they spend $20 more than they receive.