Question
John is trying to decide whether he should start serving draft beer at his pizza restaurant. Presently no beer is served. To serve beer John
John is trying to decide whether he should start serving draft beer at his pizza restaurant. Presently no beer is served. To serve beer John will need to buy an annual license for $3,000 and rent a beer cooler at an annual cost of $2,000. He will also need to employ an additional employee to deal with beer matters at a cost of $1,000 per month ($12,000 annually). He can sell 12 ounce draft beers for $3.00 each. John's cost for each 12 ounce beer is only $1.00. What number of beers does John need to serve annually to break even on selling beer?
Group of answer choices
John needs to sell 8,500 beers to break even.
John needs to sell 3,000 beers to break even
No amount of beer sales will allow john to recover his annual costs.
John needs to sell 6,500 beers to break even
John needs to sell 17,000 beers to break even
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