Question

A car wash charges customers $6 per wash. It costs the car wash company $2 per wash for materials and a base cost of $80. How many car washes are necessary for the car company to make $60 in profit?

Answer 1

Answer:

35 Car Washes  

Step-by-step explanation:

Data:-

Sale Charges per wash = $6/-

Cost per wash = $2/-

Base cost = $80/-

Required Profit = $60/-

Required:-

No of Cash Washes to reach the required profit = ?

Solution:-

Sales - VC = Contribution Margin

$6 - $2 = $4 per unit

Required Sales in Unit = Fixed Cost + Target Profit / Contribution margin per unit

= $80 + $60 / $4

= 35 Units