you work at a bakery that has monthly costs of $3,000. the average cost per item is $2. the average price…

you work at a bakery that has monthly costs of $3,000. the average cost per item is $2. the average price per item is $5. how many items must be sold to break even each month?\na. 300\nb. 600\nc. 1000\nd. 1500

you work at a bakery that has monthly costs of $3,000. the average cost per item is $2. the average price per item is $5. how many items must be sold to break even each month?\na. 300\nb. 600\nc. 1000\nd. 1500

Answer

Explanation:

Step1: Calculate profit per item

Profit per item = Price per item - Cost per item = $5 - 2=$3$

Step2: Determine break - even quantity

Let the number of items be $x$. Break - even occurs when total revenue equals total cost. Total cost is the sum of fixed cost ($3000$) and variable cost ($2x$), and total revenue is $5x$. At break - even, $5x=3000 + 2x$. Rearranging gives $5x-2x=3000$, so $3x = 3000$. Then $x=\frac{3000}{3}=1000$.

Answer:

C. 1000