Question

Akeem wants to have a lemonade stand at the community fair. It costs him $2 to make each cup of lemonade plus a $40 renters free for the stand. he sells the lemonade for $6 per cup. How many cups does Akeem have to sell to break even.

Answer 1

that’s wrong?

Answer 2

To break even, Akeem needs to cover his costs, which consist of the cost of making each cup ($2) and the rental fee ($40).
Therefore, the break-even point can be calculated by dividing the total costs by the selling price per cup:
Break-even point = (Total costs) / (Selling price per cup)

Total costs = Cost of making each cup + Rental fee
Total costs = $2 + $40
Total costs = $42

Selling price per cup = $6

Break-even point = $42 / $6
Break-even point = 7

Akeem needs to sell 7 cups of lemonade to break even.

Answer 3

Apologies for the error. Let me recalculate:

To break even, Akeem needs to cover his costs, which consist of the cost of making each cup ($2) and the rental fee ($40).
Therefore, the break-even point can be calculated by dividing the total costs by the contribution margin per cup:
Break-even point = (Total costs) / (Contribution margin per cup)

Total costs = Cost of making each cup + Rental fee
Total costs = $2 + $40
Total costs = $42

Contribution margin per cup = Selling price per cup - Cost of making each cup
Contribution margin per cup = $6 - $2
Contribution margin per cup = $4

Break-even point = $42 / $4
Break-even point = 10.5

Akeem needs to sell approximately 11 cups of lemonade to break even.