Question

Cheryl is considering adding a rack of greeting cards to her product offerings at The Bitty Bookstore. Her fixed costs associated with adding the greeting cards would be $400. Variable costs per card are $1 each. The greeting cards will sell for $3 each. Helen's break-even point would occur at ________ cards sold.

Answer 1

Answer:

Helen's break-even point would occur at 200 cards sold.

Explanation:

Hi, in order to find the break even point (BEP) in units, we need to use the following formula.

$BEP=\frac{FixedCosts}{Price-Cost(var)}$

Everything should look like this.

$BEP=\frac{400}{3-1} =200$

So, the BEP for Helen is 200 cards sold.

Best of luck.