Question

Select the correct answer.
Jeremy opens a chocolate shop in the city. He pays $1,500 a month for rent and maintenance of the shop. The price of raw materials and manufacturing the chocolates is $6,000 a month. He sells the chocolates individually and in boxes of a dozen.

Jeremy understands that his business needs a little time to become a success and decides that he wants to build a customer base initially. He is happy to break even for the first year.

If Jeremy sells 2,400 individual chocolates and 50 boxes a month, how should he price his chocolates to break even, given the costs? (Assume that the price of a box is the same as the price of 12 individual chocolates.)

A.
$1.50 apiece

B.
$2.00 apiece

C.
$2.50 apiece

D.
$3.50 apiece

Answer 1

C. $2.50 apiece

Total monthly cost = $1,500 + $6,000 = $7,500.
Chocolates sold = 2,400 + 50×12 = 3,000.
Break‑even price = $7,500 ÷ 3,000 = $2.50 each.