Hot Dog Stand sells hot dogs for $2.50 each. The variable cost per hot dog is $1.75 and fixed costs per month are $1,800. How many hot dogs must Weiner sell in a month to break even?

Question

Quizplus · Accepted Answer

To break even, total revenue must equal total costs. The contribution margin per hot dog is $2.50 - $1.75 = $0.75. To cover fixed costs of $1,800, Weiner must sell $1,800 / $0.75 = 2,400 hot dogs.

Hot Dog Stand Sells Hot Dogs for $2