Question

Brian and Amy invest $2700 to start a hair cutting business. Each hair cut costs them $1.50(supplies). They charge their customers $15 for each cut. How many hair cuts until they breakeven?

Answer 1

To break even, they need to cover the fixed costs by earning enough profit from the haircuts. The number of haircuts required to break even is 200.

To calculate the number of haircuts needed to break even, we need to determine the fixed costs and the cost per haircut. In this case, the fixed costs are the initial investment of $2700 and the cost per haircut is $1.50. The profit per haircut is the difference between the haircut price ($15) and the cost per haircut ($1.50), which is $13.50. To break even, they need to cover the fixed costs by earning enough profit from the haircuts. So, the number of haircuts required to break even is $2700 / $13.50 = 200 haircuts.