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Mickey built his lemonade stand out of $75,000 worth of plywood and paint. He uses $2.25 of lemons, sugar and water to make his product. What does the selling price of the lemonade need to be to break even at 40 glasses

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hyderali230

Answer:

The selling price of the lemonade need to be to break even at 40 glasses is $1,877.50

Explanation:

Assumption: Considering $75,000 as fixed cost:

Break-even = Fixed cost  / contribution per unit

40 = $75,000 / Contribution per unit

Contribution per unit = $75,000 / 40

Contribution per unit = $1875

Selling Price = $1,875 + $2.25 = 1,877.50

The selling price should be $1,877.50

  • The calculation is as follows:

Break-even = Fixed cost  ÷ contribution per unit

40 = $75,000 ÷ Contribution per unit

Contribution per unit = $75,000 ÷ 40

Contribution per unit = $1875

Now

Selling Price = $1,875 + $2.25

= 1,877.50

Therefore we can conclude that The selling price should be $1,877.50

Learn more: brainly.com/question/6201432

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