CDz,a local music and video retailer,spends $250 a month in advertising and inventory management.The business buys videos at a cost of $6.00 per unit and then sells each unit for $16.00.To break even in any one month,CDz would have to sell how many units?

Question

Quizplus · Accepted Answer

To break even, the total revenue earned should be equal to the total costs incurred.
Let the number of units sold be x.
Total revenue = Selling price * Number of units sold = $16x
Total costs = Advertising + Inventory cost = $250 + $6x
For breaking even, we equate total revenue to total cost:
$16x = $250 + $6x
Simplifying, we get:
$10x = $250
x = 25
Therefore, CDz would have to sell 25 units to break even.

CDz,a Local Music and Video Retailer,spends $250 a Month in Advertising