Jamara has started a home party business that hosts parties and those attending paint signs. Jamara must pay $500 a year to be a representative for Paint A Sign. In addition, Jamara buys all the materials for the parties, including the metal base, the paints, brushes, stencils and transfers. These items all add up to $10 on average. Jamara charges each participant $25 for each sign they make. Considering only these costs, Jamara's Paint A Sign business breakeven volume is:
A) 33.3 participants a year.
B) 50 participants a year.
C) 20 participants a year.
D) 14.29 participants a year.

Question

Quizplus · Accepted Answer

Jamara's total fixed costs are $500. Her variable costs are $10 per participant. Her breakeven volume is $500/$10 = 50 participants.

Jamara Has Started a Home Party Business That Hosts Parties