TunZ, a local music and video retailer, spends $250 a month on advertising and inventory management. The business buys videos at a cost of $6.00 per unit and then sells each unit for $16.00. Assuming no other costs, TunZ would have to sell _____ in order to break even in any one month.

Question

Quizplus · Accepted Answer

To break even, TunZ needs to cover the $250 monthly cost. Each unit sold provides a profit of $10 ($16 sale price - $6 cost). Therefore, $250 / $10 per unit = 25 units needed to break even.

TunZ, a Local Music and Video Retailer, Spends $250 a Month