Betty Gilmore plans to sell berry pies at a local farmer's market. The permit and space rental will cost her $2,000 for the June through August season. The pies will sell for $7.00. Ingredients and overhead average $4.00 per pie. She also has to pay five percent of her gross sales to the markets's organizers. How many pies will she need to sell to cover her fixed costs and realize a $3,000 profit?

Question

Quizplus · Accepted Answer

First, we need to calculate the total cost per pie:

$2,000 (fixed costs) ÷ 3 months ÷ 30 days ÷ 10 pies/day = $2.22

$2.22 (fixed costs per pie) + $4.00 (ingredients and overhead) = $6.22 (total cost per pie)

Now, we can calculate the revenue per pie:

$7.00 (price per pie) x 95% (after paying the market organizers) = $6.65 (revenue per pie)

To make a $3,000 profit, Betty needs to have a total revenue of:

$2,000 (fixed costs) + $3,000 (profit) = $5,000

To find out how many pies she needs to sell, divide the total revenue by the revenue per pie:

$5,000 ÷ $6.65 = 749.06

Round up to the nearest whole number:

750 pies

Therefore, she needs to sell 750 pies to cover her fixed costs and realize a $3,000 profit.

Betty Gilmore Plans to Sell Berry Pies at a Local