Margaret sells hand-knit scarves at a flea market. Each scarf sells for $25. Margaret pays $30 to rent a vending space for one day. The variable costs are $15 per scarf. How many scarves should she sell each day in order to break even?

Question

Quizplus · Accepted Answer

To break even, Margaret needs to cover both her fixed costs ($30 for the vending space) and her variable costs ($15 per scarf). The selling price per scarf is $25. Therefore, the profit per scarf is $25 - $15 = $10. To cover the $30 fixed cost, she needs to sell $30 / $10 = 3 scarves.

Margaret Sells Hand-Knit Scarves at a Flea Market