The muffin house produces and sells a variety of muffins. the selling price per dozen is $15, variable costs are $9 per dozen, and total fixed costs are $4,200. how many dozen muffins must the muffin house sell to breakeven?
Your question asks how many muffins the Muffin House needs to sell in order to breakeven 700 Muffins In order to find the answer to your question, we first need to gather important information from the question. Important Information: Selling price/ per muffin = $15Variable costs (cost to make)/ per muffin = $9Total fixed cost = $4,200 With the information above, we can find the answer to the question. The Muffin House spends $9 to make a muffin, but sells it for $15. So the Margin is $6 (profit). We would only make profit from the Margin price, so we need to get the Margin price to $4,200.This means we would need to divide 4200 by 6 to get our answer. Since they want to breakeven with the fixed cost, they need to sell as much muffins for the Margin to add up to $4,200 at the end to breakeven. When you’re done solving, you should get 700. This means that The Muffin House must sell 700 muffins in order to break even. I hope this helps!Best regards,MasterInvestor