1. With the following accounts, prepare a total monthly budget for a store that sells strawberries (strawberries) with chocolate. The production volume that the store expects monthly is 95 dozen strawberries (1,140 units). The amounts below are monthly and are to produce 1,140 chocolate covered strawberries.

Water: $260 Light: $320 Internet: $110 Chocolate, melt bar: $6.00/kilo, you need 6 kilos Napkins: $30/pack, you need 5 packs 1 employee (1 year contract): $1,100 Space rent: $450 Strawberries: $6.99 for 15 strawberries Total expected sales: 1,140 strawberries (units) at $3.50 each Cardboard containers: $22/pack, you need 10 packs

1. What are fixed costs? What are variables? (10 points) 2. What is the expected net income? If it makes a profit, is it reasonable? (20 points) 3. Is it reasonable to charge $3.50 for each chocolate strawberry? Using the knowledge from the class, how would you calculate the price that should be charged for each strawberry? You can give numerical examples, formulas or whatever you think is necessary to argue your answer in 5 lines. (15 points)