Question

A bicycle store costs $2100 per month to operate. The store pays an average of $75 per bike. The average selling price of each bicycle is $105. How many bicycles must the store sell each month to break even?

A. The store must sell 14 bicycles each month to break even.
B. The store must sell 18 bicycles each month to break even.
C. The store must sell 20 bicycles each month to break even.
D. The store must sell 24 bicycles each month to break even.

Answer 1

To break even, the store must sell 70 bicycles each month.

Step-by-step explanation:

To break even, the store needs to cover its monthly operating costs, which include the cost of operating the store and the cost of purchasing bicycles. Let's calculate:

1. Operating costs: $2100
2. Cost per bike: $75
3. Selling price per bike: $105

To find the number of bicycles the store needs to sell, we can use the formula:

Break-even point = Operating costs / (Selling price per bike - Cost per bike)

Substituting the values:

Break-even point = 2100 / (105 - 75)

Simplifying the equation:

Break-even point = 2100 / 30

Break-even point = 70

Therefore, the store must sell 70 bicycles each month to break even.