Question

Mickey built his lemonade stand out of $75,000 worth of plywood and paint. he sells a glass of lemonade for $30 and uses $1.25 of lemons, sugar and water to make his product. how many glasses of lemonade does he need to sell to break even?

Answer 1

Break even point is where all the expense is already covered by the revenue. In this case, the expense would be the stand ($75,000) and the lemon+sugar+water ( $1.25 per glass). The revenue comes from lemonade($30/glass). Then the equation would be:

$30 * glass of lemonade= $75,000 + $1.25 * glass of lemonade
($30-$1.25) * glass of lemonade= $75,000
glass of lemonade= 2608.7