After closing her beloved restaurant due to the pandemic, Kiki started to sell her signature sauces to consumers. The ingredients for a sauce bottle cost $1.25 and packaging costs another $0.50. A distribution company handles the storage and distribution of the sauce and charges $0.75 or each bottle. Kiki has calculated that the overhead cost is $5000 per month. She sells one sauce bottle at $5.00 to the customers. a. How many sauce bottles must Kiki sell to break-even? What is the total revenue for breakeven? b. If she can sell only 1000 bottles, what should be the selling price to break-even?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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- After closing her beloved restaurant due to the pandemic, Kiki started to sell her signature sauces
to consumers. The ingredients for a sauce bottle cost $1.25 and packaging costs another $0.50. A
distribution company handles the storage and distribution of the sauce and charges $0.75 or each
bottle. Kiki has calculated that the overhead cost is $5000 per month. She sells one sauce bottle
at $5.00 to the customers.
a. How many sauce bottles must Kiki sell to break-even? What is the total revenue for
breakeven?
b. If she can sell only 1000 bottles, what should be the selling price to break-even?
Transcribed Image Text:- After closing her beloved restaurant due to the pandemic, Kiki started to sell her signature sauces to consumers. The ingredients for a sauce bottle cost $1.25 and packaging costs another $0.50. A distribution company handles the storage and distribution of the sauce and charges $0.75 or each bottle. Kiki has calculated that the overhead cost is $5000 per month. She sells one sauce bottle at $5.00 to the customers. a. How many sauce bottles must Kiki sell to break-even? What is the total revenue for breakeven? b. If she can sell only 1000 bottles, what should be the selling price to break-even?
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