A small fast food restaurant invests $5000 to produce a new food item that will sell for $3.49. Each item can be produced for $2.16. How many items must be sold to break even?

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A small fast food restaurant invests $5000 to produce a new food item that will sell for $3.49. Each item can be produced for $2.16. How many items must be sold to break even?

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Answer 1 · 2015-08-07T21:30:56

Assuming the #$5000# investment does not produce any items itself, the number of items to sell to recover the investment is:

#ceil(($5000) / ($3.49-$2.16)) = 3760#

Explanation:

The margin on each item is #$3.49 - $2.16 = $1.33#

If the #$5000# investment just allowed the production environment, equipment etc. to be set up, but did not produce any items itself, then it will be recovered purely from the profit margin on sales of items.

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A small fast food restaurant invests $5000 to produce a new food item that will sell for $3.49. Each item can be produced for $2.16. How many items must be sold to break even?

1 Answer

Explanation:

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