After receiving bad service at the local car wash, Ryan has decided to start VDB Detailing! One of his first decisions when planning his business – he needs to calculate the number of vehicles he will need to detail before breaking even. His uncle has offered to let him use a small section of his shop for only $300 per month. Ryan is going to pay his friend, Gabe, $10/hour to help him. He has estimated his additional expenses and other details to be the following:
Insurance $200/month
His share of monthly utilities $85
Wax $2.00
Towels, soap, and other supplies $3.50/vehicle
Leasing of equipment $100/month
Marketing $105/month budgeted
He estimates that it will take him 4 hours to detail a vehicle if he has help from his friend (Hint: how much is this total per car?).
He plans to charge $110 per vehicle.
Question #1 – How many vehicles does Ryan need to detail each month to break even?