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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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  1. 15 October, 02:01
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    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
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