Question

Jaheem makes and sells mittens. The mittens cost him $3 a pair to make, and he sells them for $10. This Saturday, he is renting a booth at a craft fair for $45. Use this information for Items 1–3.

A) What is Jaheem's profit if he sells 10 pairs of mittens?
B) How many mittens must Jaheem sell to break even on the craft fair booth rental?
C) If Jaheem sells 20 pairs of mittens, how much profit does he make after booth rental?

Answer 1

Jaheem's profit for selling 10 pairs of mittens is $25, he must sell at least 7 pairs to break even on the booth rental, and his total profit after renting the booth and selling 20 pairs is $95.

Step-by-step explanation:

A) To calculate Jaheem's profit for selling 10 pairs of mittens, first, find the total revenue by multiplying the selling price per pair by the quantity sold, which is

$10 × 10 = $100.

Then, calculate the total cost of making the mittens, which is

$3 × 10 = $30.

The profit before booth rental is total revenue minus total cost, i.e.,

$100 - $30 = $70.

Finally, subtract the booth rental from this profit:

$70 - $45 = $25.

B) To break even on the booth rental cost of $45, Jaheem must sell enough mittens so that the profit equals the rental cost. Since he makes a profit of $7 ($10 - $3) per pair of mittens, he needs to sell $45 / $7, which is approximately 6.43 pairs. Since Jaheem can't sell a fraction of a pair, he needs to sell at least 7 pairs to break even.

C) If Jaheem sells 20 pairs, his total revenue would be

$10 × 20 = $200.

His total cost would be

$3 × 20 = $60.

The profit before booth rental is

$200 - $60 = $140.

After paying for the booth rental, his total profit would be

$140 - $45 = $95.