Answer:
Instructions are below.
Step-by-step explanation:
Giving the following information:
She must pay $200 to rent a booth at the craft fair. The materials for each pendant cost $7.80, and she plans to sell each pendant for $13.50.
We weren't provided with questions to answer. But, I will assume that we need to determine the number of units to be sold to break-even.
To calculate the break-even point in units and dollars, we need to use the following formulas:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 200 / (13.5 - 7.8)
Break-even point in units= 35 units
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 200 / (5.7/13.5)
Break-even point (dollars)= $473.68
If you want to reach a certain profit:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point (dollars)= (fixed costs + desired profit) / contribution margin ratio
