Julio has started his very own floral business. He sells centerpieces for $19.50 each. His fixed costs are $500 per month, and each centerpiece cost $8 to produce. Determine your break-even point. Suppose you wish to break even by selling only 25 centerpieces. At what price would you need to sell each centerpiece?

At the current price, each centerpiece contributes $19.50 − $8 = $11.50 toward the $500 in fixed costs, so Julio breaks even at about 43.5 centerpieces (44 whole centerpieces). To break even with 25, he must cover $500 in fixed costs plus 25 × $8 = $200 in production costs, for total costs of $700. Dividing $700 by 25 gives a selling price of $28 each, so the correct choice is “Julio must sell 25 centerpieces at $28 each to break even.”

AI-written and checked against the verified answer.