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Denise sells silk scarves at a hobby fair. Each scarf sells for $25 and has a variable cost of $15. Denise’s booth rental for one day is $30. Based on this information, what total revenue amount does Denise need to earn to break-even?

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Answer:

Break-even point (dollars)= $75

Explanation:

Giving the following information:

Each scarf sells for $25 and has a variable cost of $15. Denise’s booth rental for one day is $30.

To calculate the break-even point in dollars, we need to use the following formula:

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 30 / [(25 - 15)/25]

Break-even point (dollars)= $75

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