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Question

a bicycle store cost 1500 per month to operate. The store pays an average of $45 per bike. The average selling price of each bicycle is $65.How many bicycles must the store sell each month to break even?

Answer 1

Let's think of this from a bank account point-of-view:

 

Each month there is a debit (a cost) of $1500, so subtract that from your balance.

 

For each bicycle, there is:

    a debit of $45

    a sale price of $65

 

This means that there is a profit of $20 (that is, $65-$20) for each bicycle.

 

The bank account balance change FOR THE MONTH looks like this:

    C = -$1500 -$45x + $65x                where x=number of bicycles sold

    C = -$1500 + $20x            [note: this looks like the equation of a line]

 

To "break even" means that costs=income and the bank account, C, changes an amount of zero.

    0 = -1500 + 20x

   1500 = 20x

    75 = x

 

When the bike shop sells 75 bicycles in a month, it has "broken even" for that month.