The break-even markup was 40 percent of the selling price. If the total income for a day on which the store broke even was $6400, what did the store owner pay for the items sold?
+128731 The break-even markup was 40 percent of the selling price. If the total income for a day on which the store broke even was $6400, what did the store owner pay for the items sold?
Let me take a stab at this one. Let's suppose we had a store and that every item sold for $1. Then...40% of the selling price must just be 40 cents. Then, we must have paid 60 cents for each item because our cost (per item) - 60 cents - plus the markup (per item) - 40 cents = selling price = $1.
Then we must have sold 6400 items, and since we paid 60 cents for each, our total cost would have been 6400*(.60) = $3840. Note that we must have fixed costs of $(6400 - 3840) = $(2560) per day. This makes sense because our cost function is .60(x) + 2560 and our revenue function is just 1(x). If x represents the number of items sold in a day, these "curves" are equal when x = 6400 !!! Thus we "break even" at that point. Also note that our fixed cost is 40% of our break-even revenue. The more items that we sell above 6400, the less our fixed cost is as a % of our revenue. For example, at 10,000 items, our fixed cost is only 25.6% of the revenue.
I think that's it......but I'll consider constructive criticism, too......
+128731 The break-even markup was 40 percent of the selling price. If the total income for a day on which the store broke even was $6400, what did the store owner pay for the items sold?
Let me take a stab at this one. Let's suppose we had a store and that every item sold for $1. Then...40% of the selling price must just be 40 cents. Then, we must have paid 60 cents for each item because our cost (per item) - 60 cents - plus the markup (per item) - 40 cents = selling price = $1.
Then we must have sold 6400 items, and since we paid 60 cents for each, our total cost would have been 6400*(.60) = $3840. Note that we must have fixed costs of $(6400 - 3840) = $(2560) per day. This makes sense because our cost function is .60(x) + 2560 and our revenue function is just 1(x). If x represents the number of items sold in a day, these "curves" are equal when x = 6400 !!! Thus we "break even" at that point. Also note that our fixed cost is 40% of our break-even revenue. The more items that we sell above 6400, the less our fixed cost is as a % of our revenue. For example, at 10,000 items, our fixed cost is only 25.6% of the revenue.
I think that's it......but I'll consider constructive criticism, too......
