Question

Joe’s band is recording original songs in order to make its first album. His producer is charging the band members $1000
for the studio recording time and $2.00
for each album sold.

If the band intends to sell each album for $10
and just wants to break even, what amount of money the band will need to earn from selling their albums?
Responses

$ 125

$ 1,200

$ 1,250

$5,000

Answer 1

To determine the amount of money the band needs to earn from selling their albums in order to break even, we need to consider both the fixed costs (studio recording time) and the variable costs (cost per album sold).

1. **Fixed Costs**:
- Studio recording time: $1000

2. **Variable Costs**:
- Cost per album sold: $2.00

Let \( n \) be the number of albums sold. The total cost for the band would be:

\[
\text{Total Cost} = \text{Fixed Costs} + (\text{Variable Cost per Album} \times n)
\]
\[
\text{Total Cost} = 1000 + 2n
\]

The revenue from selling \( n \) albums at $10 each would be:

\[
\text{Revenue} = 10n
\]

To break even, the total revenue must equal the total cost:

\[
10n = 1000 + 2n
\]

Now let's solve for \( n \):

\[
10n - 2n = 1000
\]
\[
8n = 1000
\]
\[
n = \frac{1000}{8} = 125
\]

Now we can calculate how much money the band needs to earn by selling these 125 albums:

\[
\text{Revenue} = 10n = 10 \times 125 = 1250
\]

Therefore, the amount of money the band will need to earn from selling their albums in order to break even is **$1,250**.

So, the correct response is:

**$1,250**