Pauline and Maxim start a business that manufactures cutting tools. They sell the tools for $80 each. Their monthly fixed costs are $3800 for the building lease and utilities and $2800 for salaries. The cost of supplies for each tool is $12.

a. To break even, how many tools do they have to sell every month?

b. If the cost of supplies for each tool is reduced to $10 and they hire one more person for $2000 per month, calculate the minimum number of tools that they would have to sell to ensure that they do not incur a loss.

AppendixLO1