Question

Tommy is sehling lemonade for $0.4 and expects to have labor costs of $0.05 per cup and material expense of $0.09 por cup. Along comes Mom and charges him rent for the street oomer of $24. Approximately how many cups of Lemonade does he noed to sell to break oven?

Answer 1

Tommy needs to sell at least 93 cups of lemonade to break even when taking into account his labor, material, and rent costs.

Step-by-step explanation:

To determine how many cups of lemonade Tommy needs to sell to break even, we need to calculate the total costs and then find out how many cups he needs to sell to cover those costs. Tommy's cost per cup consists of labor and material expenses. The labor cost is $0.05 per cup and the material expense is $0.09 per cup. Therefore, the total cost per cup is $0.05 + $0.09 = $0.14. Additionally, Tommy has to pay a fixed rent of $24 for the street corner.

Tommy sells each cup of lemonade for $0.4. To calculate the break-even point, we take the fixed cost of $24 (rent) and divide it by the profit per cup, which is the selling price minus the cost per cup: $0.4 - $0.14 = $0.26. Therefore, $24 ÷ $0.26 approximately equals 92.31, which means Tommy needs to sell at least 93 cups of lemonade to break even.