Question

An enterprising college student has decided to purchase a local car wash business. The purchase cost is
$150,000. Car wash will be priced at $5.50, and variable cost per car (soap, water, labor, etc) is expected to
equal $1.50. how many cars must be washed in order to recover the $150,000 purchase price?

Answer 1

Answer:

the contribution margin is sales price less variable cost per unit

= RO 5- 1.5 = 3.5

The break even units are RO 15000/3.5 (fixed cost/ (sales price per unit - variable cost per unit )

= 4286 cars

Step-by-step explanation:

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