Becky's Bakery sells three large muffins for every two small ones. A small muffin sells for $3, with a variable cost of $2.00. A large muffin sells for $5 with a variable cost of $2.50. Fixed costs are $3,000 per month. How much is the breakeven volume for each type of muffin?

Question

Quizplus · Accepted Answer

A) Calculations:
$5.00 - $2.50 = $2.50
$3.00 - $2.00 = $1.00
($2.50 × 3) + ($1.00 × 2 ) = $9.50
$9.50/5 = $1.90
$3,000/$1.90 = 1,579
1,579 × 3/5 = 947
1,579 × 2/5 = 632

Becky's Bakery Sells Three Large Muffins for Every Two Small