Question

Evan is starting a business selling handmade necklaces. He has decided to invest an initial amount of $40 for advertising, and materials cost $1 for each necklace he makes. Evan can sell his creations for $41 per necklace. Once he makes and sells a certain number of necklaces, he will break even, with identical expenses and sales. What would the total expenses and sales be then? How many necklaces would that take?

Answer 1

Evan will break even after selling one handmade necklace, with both the total expenses and sales amounting to $41.

Step-by-step explanation:

Evan is starting a business selling handmade necklaces with an initial investment of $40 on advertising and materials costing $1 for each. Each necklace is sold for $41. To calculate the break-even point, where total expenses equal total sales, we use the following equation:

Total Sales = Total Expenses

Total Sales = Number of Necklaces × Selling Price per Necklace

Total Expenses = Initial Investment + (Cost of Material per Necklace × Number of Necklaces)

So we have:

Number of Necklaces × $41 = $40 + (Number of Necklaces × $1)

Solving this equation:

Number of Necklaces = $40 / ($41 - $1) = $40 / $40 = 1

Thus, Evan needs to make and sell 1 necklace to break even. At that point, total expenses and sales would both be $41.