Question

Madison sells winter hats at a local craft fair. Madison already had $20 in online sales. then she sold each hat for $1.25 at the craft fair. Madison paid S50 to enter the craft fair. It also costs Madison $0.95 to make each hat. How many hats will Madison have to sell to break even?

Answer 1

Madison will have to sell at least 167 hats to break even.

Step-by-step explanation:

To determine how many hats Madison will have to sell to break even, we need to calculate her total costs and total revenue.

Madison's fixed costs are $50 to enter the craft fair. She also incurs variable costs of $0.95 for each hat she makes.

Her total costs can be calculated by adding her fixed costs to her variable costs multiplied by the number of hats she sells.

Her total revenue can be calculated by multiplying the number of hats she sells by the selling price of each hat.

To break even, Madison's total costs must be equal to her total revenue. We can set up an equation to solve for the number of hats she needs to sell:

Total Costs = Total Revenue

$50 + ($0.95 x number of hats) = ($1.25 x number of hats)

Simplifying the equation, we get:

$50 + $0.95x = $1.25x

Subtracting $0.95x from both sides, we get:

$50 = $0.3x

Dividing both sides by $0.3, we get:

x = 166.67

Since Madison cannot sell a fraction of a hat, she will have to sell at least 167 hats to break even.