Elizabeth is the manager of a new spa opening in Gainesville and wants to know how much to charge for a massage. She knows that her fixed costs are $1850 and her variable costs per massage are $25. Furthermore, she assumes that her staff can give 50 massages per day. To break even, she would have to charge what price?

Question

Alyssa

Business

15 October, 01:49

Elizabeth is the manager of a new spa opening in Gainesville and wants to know how much to charge for a massage. She knows that her fixed costs are $1850 and her variable costs per massage are $25. Furthermore, she assumes that her staff can give 50 massages per day. To break even, she would have to charge what price?

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Answers (1)

Know the Answer?

Dwayne Ross · Answer 1

Sales Price = $62

Explanation:

Break-Even formula:

⇒ Break-Even Units = Fixed Costs

Sales Price - Variable Costs

⇒ 50 = 1850

Sales Price - 25

⇒ Sales Price - 25 = 1850

50

⇒ Sales Price - 25 = 37

⇒ Sales Price = 37 + 25

⇒ Sales Price = $62