K-Block cooking charts are poster-sized recipes designed to encourage children to cook. The recipe cards are sold in packages of four. Fixed costs for the company are $6,000, and variable costs per card are $1. A package of four cards is sold for $9.99. What is the company's break-even point in number of packages?

Question

Quizplus · Accepted Answer

To find the break-even point, we first calculate the profit per package. The variable cost for a package of four cards is $4 ($1 per card x 4 cards). Selling a package for $9.99 and subtracting the variable cost of $4 gives a profit of $5.99 per package. To cover the fixed costs of $6,000, we divide $6,000 by $5.99, which gives approximately 1002 packages.

K-Block Cooking Charts Are Poster-Sized Recipes Designed to Encourage Children