The owner of a small restaurant that sells take-out fried chicken spends monthly amounts of $2,500 in rent, $500 in utilities, $750 in loan interest, $200 in insurance premium, and $250 for advertising on local buses.A bucket of take-out chicken is priced at $9.50.Unit variable costs for the bucket of chicken are $5.50. At what level of sales, in dollars of revenue, will the restaurant break even?
A)$9,386
B)$9,500
C)$9,975
D)$29,925

Question

Quizplus · Accepted Answer

The break-even point is calculated as fixed costs divided by unit price minus unit variable costs, or $4,200 F1F1F1S1F1F1F10 ($9.50 - $5.50), which equals to 1,050 buckets of chicken.Multiplying this by the price of each bucket of chicken will give us the break-even point in dollar terms.This amounts to $9.50 times 1,050, which equals $9,975.Thus, $9,975 is the break-even point in dollars.

The Owner of a Small Restaurant That Sells Take-Out Fried