You own a Brownie shop. You have 2 employees that you pay a salary of $1,000 each, everymonth. The machine to make them costs $100/ month to lease. You can make 100 Brownieswith the machine using $20 of ingredients. Utilities (electric, heat etc.) and Rent for the shopis a total of $1,750 per month. There are no other costs. Brownies sell for $3 each. A: Howmany Brownies would you need to sell to break even in a month? B: Instead of just breakingeven, if you make 3000 Brownies in a month - what is your Gross Margin and your OperatingProfit for the month?

Breakeven Point : The break-even point is a fundamental concept in business and finance that…

Answered: is a total of $1,750 per month. There…

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

Problem 1PS

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1. You have a small business selling cans of HuntBi, a reasonably nasty-tasting energy drink. You sell each can of HuntBi for $12.00. Each can costs you $5.00 to purchase from the manufacturer. You pay your salesperson a 20% commission on all sales on top of a base salary of $1,800 per month. Your rent is $1,000 per month. Other miscellaneous costs (insurance, utilities, etc.) average $512 per month. You are pretty sure you can sell 1,000 cans per month at the $12.00 price point. A. How many cans do you need to sell to breakeven each month (round up to the nearest whole can)? B. How much monthly operating income will you have if you sell 1,000 cans per month? C. If tax rates are 24%, how much net income will you make if you sell 1,000 cans? You are considering offering a $1.00 off coupon for each can to increase sales. You think sales will increase to 1,500 cans per month (assuming each can will be purchased with a coupon). A fixed coupon processing fee of $288 will be incurred each…
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is a total of $1,750 per month. There are no other costs. Brownies sell for $3 each. A: How many Brownies would you need to sell to break even in a month? B: Instead of just breaking even, if you make 3000 Brownies in a month - what is your Gross Margin and your Operating Profit for the month?