You Are Considering Opening a Fast-Food Store

Multiple Choice

You are considering opening a fast-food store. Your fixed costs for the required land, building, parking lot paving, kitchen equipment, and neon sign will be $1,000,000. The variable cost will be $1.89 for servings which will sell for $2.89. How many servings must you sell to break even?

A) 1,000,000
B) 1,200,000
C) 2,890,000
D) 189,000
E) Cannot be determined from the data given.