Question

A bookstore costs $120 a day to keep open, and it spends $14 for each book that it sells. 11
each book sells for $20, what is the break-even point for this bookstore

Answer 1

Answer:

The break-even point for this bookstore is 20 units

Explanation:

We know that break even point is given by the following formula,

$\frac{\text { Fixed costs }}{\text { (Price per unit - Variable costs) }}$

Here, we are given that bookstore costs $120 per day to keep open so fixed cost = 120$

Price per unit = price of each book =20$ and

variable cost = $14

Substituting these in the formula, we get

 $\frac{120}{(20-14)}$

=$\frac{120}{6}$   = 20

20 units which is the The break-even point for this bookstore.