Kiwi World is a small zoo displaying native animals. The entrance fee is $15 per person. Variable costs of running the zoo are $8 per visitor and fixed costs are $200,000 per annum. The number of visitors that would be needed to make a profit of $20,000 per annum is:

Question

Quizplus · Accepted Answer

Let's set up a profit equation:
Profit = Revenue - Total Costs
We know that fixed costs are $200,000 per annum and variable costs are $8 per visitor. Let's use "x" to represent the number of visitors:
Profit = ($15x) - ($8x + $200,000)
We want to make a profit of $20,000 per annum:
$20,000 = ($15x) - ($8x + $200,000)
$20,000 = $7x - $200,000
$220,000 = $7x
x = 31,428.57
Since we can't have a fraction of a person, we round up to the nearest whole number. Therefore, we need 31,429 visitors to make a profit of $20,000 per annum.

The best choice is A, as it is the only option that matches the calculated answer.

Kiwi World Is a Small Zoo Displaying Native Animals