contestada

A retailer spends a $500 per month to keep its online shop active and updated. The store acquires shirts at a cost of $5 per shirt. Each shirt sells for a marginal benefit of $10 per shirt.

How many shirts would you have to sell for it’s marginal benefits to be greater than its total costs?

Respuesta :

Samawati

Answer:

100 shirts

Explanation:

Borrowing from the contribution margin concept, the level where the marginal benefit is greater than total costs is the break-even point.

Break-even point = fixed cost / contribution margin per unit.

For this retailer,

Fixed costs are $500,

The contribution margin per unit = selling price- variable cost

=$10-$5

=$5

Break-even point

= $500/$5

= 100units

ayokenny2001

The retailer would have to sell 100 shirts for it’s marginal benefits to be greater than its total costs.

What is breakeven point?

This is the point where the additional gain derived is more than the total costs.

Applying break even point, we'll have

Break-even point

= Fixed cost / Contribution margin per unit.

Fixed cost

= $500

Contribution margin per unit

= Selling price - Variable cost

= $10 - $5

=$5

Break-even point

= $500 / $5

= 100units

Hence, the retailer would have to sell 100 shirts for it’s marginal benefits to be greater than its total costs.

Learn more about break even point here : https://brainly.com/question/21137380

#SPJ9

Otras preguntas