Greg is the owner of a full-service car wash.For the month of December he paid $2,000 in rent,$700 in utilities,$2,950 in salaries,and $50 on advertising.A full service car wash costs $10.50.Unit variable costs per car wash are $2.50.How many full-service car washes does Greg need to sell to break-even each month?
A)625
B)713
C)476
D)543
E)619

Question

Quizplus · Accepted Answer

To find the break-even point, calculate the total fixed costs ($2,000 + $700 + $2,950 + $50 = $5,700) and divide by the contribution margin per car wash ($10.50 - $2.50 = $8.00). Break-even point = $5,700 / $8.00 = 712.5, rounded up to 713 car washes.

Greg Is the Owner of a Full-Service Car Wash