Question

Ramona has a booth at a craft show. She sells door

wreaths as a money making project. The booth

costs her $200, and each wreath costs her $10 for

material. If she sells each wreath for $30, how many

wreaths does she have to sell to break even?

Friday, January 8, 2021

Record your answer and fill in the bubbles on

your answer document. Be sure to use the correct

place value

Answer 1

Answer: 10 wreaths

Explanation:

First identify the terms.

She has a booth that cost $200. This price will not change thus making it a Fixed cost.

Making a wreath would cost her $10 each time so this is a Variable cost.

She sells the wreath for $30 so this is the selling price.

Breakeven = Fixed Cost / Contribution margin

Contribution margin = Selling price - Variable cost

= 30 - 10

= $20

Breakeven point = 200/20

= 10 wreaths