Erin has developed a new lotion that will help children with sensitive skin. She invests $15,225 in equipment to manufacture and package her lotion. Each bottle costs $3.25 to manufacture and sells for $12. How many bottles of lotion must she make and sell before her business breaks even?
Accepted Solution
A:
"Break even" occurs when Revenue = Costs.
So, solve this equation:
($12/bottle)x = $15225 + ($3.25)x
Consolidating the x terms: $8.75x = $15225 $15225 Solving for x: x = ------------- = 1740 bottles $8.75
Her business will break even when she has sold 1740 bottles of her lotion.