Compute the breakeven point in units sold.
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Good morning, Please answer questions
Patsy Smith is planning to sell her special knife for $15 per unit. She purchases units from a
local distributor for $6 each. She can return any unsold units for a full refund. Fixed costs for
booth rental, including lighting and security is $4500.
Required
a) Compute the breakeven point in units sold.
b) Suppose the unit purchased is $5 instead of $6, the fixed cost increases by $500, but
the selling price is unchanged. Compute the new breakeven point in units sold.
c) Using the above data, explain how cost behaviour affects Patsy Smith’s decisionmaking?
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Solved in 3 steps
- Patsy Smith is planning to sell her special knife for $15 per unit. She purchases units from alocal distributor for $6 each. She can return any unsold units for a full refund. Fixed costs forbooth rental, including lighting and security are $4500. Required a) Compute the breakeven point in units sold. b) Suppose the unit purchased is $5 instead of $6, the fixed cost increases by $500, butthe selling price is unchanged. Compute the new breakeven point in units sold. c) Using the above data, explain how cost behavior affects Patsy Smith’s decision-making?1. Patsy smith is planning to sell her special knife for $15 per unit. She purchases units from alocal distributor for $6 each. She can return any unsold units for a full refund. Fixed costs forbooth rental, including lighting and security is $450. Compute the breakeven point in units sold 2. Suppose the unit purchased is $5 instead of $6 but the selling price is unchanged. Compute the new breakeven point in units sold. 3. Management would like to achieve a target profit after taxes of $300,000. The company’s income tax rate is 25 percent. What target profit before taxes is required to achieve the $300,000 after-tax?Susan Carrie is planning to sell her special pottery for $25 per unit. She purchases units froma local distributor for $11 each. She can return any unsold units for a full refund. Fixed costsfor booth rental, including lighting and security is $8500.Requireda) Compute the breakeven point in units sold. b) Suppose the unit purchased is $9 instead of $11, the fixed cost increases by $2000,but the selling price is unchanged. Compute the new breakeven point in units sold. c) Using the above data, explain how cost behaviour affects Patsy Smith’s decision-making?
- Susan Carrie is planning to sell her special pottery for $25 per unit. She purchases units from a local distributor for $11 each. She can return any unsold units for a full refund. Fixed costs for booth rental, including lighting and security is $8500. Required a) Compute the breakeven point in units sold. b) Suppose the unit purchased is $9 instead of $11, the fixed cost increases by $2000, but the selling price is unchanged. Compute the new breakeven point in units sold. c) Using the above data, explain how cost behaviour affects Patsy Smith's decision- making?You are buying and reselling items found at your local thrift shop. You found an antique pitcher for sale. If you need a 46% markup on cost and know most people will not pay more than $25 for it, what is the most you can pay for the pitcher? Note: Round your answer to the nearest cent. Maximum pay ICar Rentals The cost C, in dollars, of a one-day car rental ismodeled by the function C1x2 = 0.35x + 45, where x is thenumber of miles driven.(a) What is the cost if you drive x = 40 miles?(b) If the cost of renting the car is $108, how many miles didyou drive?(c) Suppose that you want the cost to be no more than $150.What is the maximum number of miles that you candrive?(d) What is the implied domain of C?(e) Interpret the slope.(f) Interpret the y-intercept.
- As shown below, a shop purchases and sells a certain type of product. Purchasing price : $10 per unit Selling price : $15 per unit Fixed cost : $1,000 How many units are sold at a “break even” point, where there is neither a profit nor a loss?José Ruiz starts a company that makes handcrafted birdhouses. Competitors sell a similar birdhouse for $275 each. Jose believes he can produce a birdhouse for a total cost of $235 per unit, and he plans a 20% markup on total cost. (a) Compute José's planned selling price. (b) Is José's price lower than competitors' price? Complete this question by entering your answers in the tabs below. Required A Required B Compute José's planned selling price. Selling price per unitCost, Revenue, Profit You decide to begin selling ice cream cones at the local park and swap. Your cost for each ice cream cone is $1.33 plus you have to pay a fixed weekly fee of $240 for the booth. Your plan is to sell each ice cream cone for $2.75. 1. Write an expression to represent your total costs for the week if you sell n ice cream cones. Total Costs: 2. Write an expression to represent the revenue from the sale of n ice cream cones during the week. Revenue: 3. Write an expression that represents the profit for selling n ice cream cones in a given week. Profit: How many ice cream cones must you sell in order to make a positive profit? In order to make a positive profit, you would have to sell Select an answer ice cream cones. ↑
- Marcus Allen is evaluating a business opportunity to sell premium car wax at vintage car shows. The wax is sold in 64-ounce tubs. Marcus can buy the premium wax at a wholesale cost of $29 per tub. He plans to sell the premium wax for $84 per tub. He estimates fixed costs such as travel costs, booth rental cost, and lodging to be $880 per car show. Requirement 1. Determine the number of tubs Marcus must sell per show to break even. Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach. Units sold Sales in units Marcus must sell tubs per show to breakeven. Requirement 2a. Determine the sales volume in units necessary to earn the desired profit assuming Marcus wants to earn a profit of $1,320 per show. Marcus must sell tubs per show to earn a profit of $1,320 per show. b. Determine the sales volume in dollars necessary to earn the desired profit assuming Marcus wants to earn a profit of 1,320 per show.…A local Pilates studio recently began offering a monthly subscription servlce for Its patrons. Suppose a particular patron at this studio has the following willingness-to-pay schedule, per sesslon. Session willingness to Pay 1st $77 2nd $66 3rd $55 4th $44 5th $33 6th $22 Suppose this consumer would not demand any more sesslons, even for free. Also assume that the marginal cost to the studlo, per sesslon, is constant at $11. At this price and quantity, consumer surplus At a price of $71.50 per sesslon, the number of sesslons demanded by this consumer would be Is and producer surplus is Suppose the studio has devised a new pricing scheme for consumers who demand more than 1 sesslon. This pricing scheme is a subscription service, whereby consumers can pay a flat fee of $237.60 and can have up to 6 sesslons total. Using this Eubscription pricing model, this consumer would demand sessions. Under this scenarlo, consumer surplus Is and producer surplus is (Hint: For consumer surplus,…An office supply store adds a $2.50 markup to calculators and sells them for $6.95. (a) What is the cost (in $) of the calculators? $ (b) What is the percent markup based on cost? (Round your answer to the nearest tenth of a percent.) %