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 market'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

To cover fixed costs, Betty needs to make $2,000. To also realize a profit of $3,000, she needs an additional $3,000 in revenue.

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

She makes $3.00 profit per pie ($7.00 selling price - $4.00 cost) and needs to give 5% to the market organizers, or $0.35 per pie (5% of $7.00).

Profit per pie = $3.00 - $0.35 = $2.65

Number of pies needed to make $5,000 = $5,000 ÷ $2.65 per pie = 1,887 pies

Therefore, the best choice is C – 1,887 pies.

Betty Gilmore Plans to Sell Berry Pies at a Local