Klaus Nicholas plans to sell Christmas trees from a vacant lot in downtown Springfield.The trees will cost him $1200 per 100 tress.They can only be purchased in lots of 100.It will cost Klaus $1,500 to rent the lot from November 1 through December 30.If Klaus sells the trees for $20 each,how many trees must he sell to break even? Assume that he purchases makes an initial,non-refundable purchase of 300 trees.
A)$1,500/($20-$12)= 188 trees with a very small profit on the last tree.
B)All 300 trees because he must purchase them in lots of 100.
C)At least 255 trees because all costs are fixed once the trees are purchased.
D)The Christmas tree project can never break even.

Question

Quizplus · Accepted Answer

Klaus needs to cover the cost of the trees and the lot rental. The cost for 300 trees is $3,600 and the lot rental is $1,500, totaling $5,100. Selling each tree for $20, he needs to sell 255 trees to cover these costs ($5,100 / $20 = 255).

Klaus Nicholas Plans to Sell Christmas Trees from a Vacant