ALGEBRA ONE WORD PROBLEM NUMBER 2

Question

A bicycle costs 3600 per month to operate. The store pays an average of $80 per bike. The average selling price of each bicycle is $120. How many bicycles must the store sell each month to break even?

Answer 1

A bicycle store costs 3600 per month to operate. The store pays an average of $80 per bike. The average selling price of each bicycle is $120. How many bicycles must the store sell each month to break even?

To solve this problem we need to understand that the break even point is determined by first figuring out what the profit is on each bicycle sold.

The store pays $80 for each bike and the selling price is$120. So the profit margin is $120 - $80 = $40.

Then we can use this number and divide it into the total monthly operating costs to find out how many bikes must be sold to reach the break even point. Since the operating costs are $3600 per month, we divide $3600 / $40 = 90 Bicycles. This means the store will need to sell 90 bicycles to break even each month.