Question

Rosalie is thinking of advertising her sandwich shop on the radio. She is considering a package of 60 radio spots for $5,000. She only sells Cuban sandwiches for $10 and her average cost per sandwich is $5. How many additional sandwiched would she have to sell to breakeven if she buys the radio spots?

Answer 1

It need to sale 1,000 additional sandwiches to break-even

Step-by-step explanation:

The contribution margin per sandwich is $5 (10 sale price - 5 variable)

the radio spot will be considered a fixed cost thus, to break even we divide it by the contribution:

$5,000 / $5 per sandwich = 1,000 sandwiches