Question
A restaurant bakes 6000 breads every month. Last month only 4500 breads were sold. The selling price is 5.75 per unit. The material cost is
A restaurant bakes 6000 breads every month. Last month only 4500 breads were sold. The selling price is 5.75 per unit. The material cost is 1.25 per unit and the labor cost per unit is equal to 1.75. The total fixed cost is budgeted at 4000 per month.
Determine how Total Variable Cost varies as Unit Labor Cost varies from $1.75 to $4.25 (in $0.50 increments) and Unit Material Cost varies from $1.25 to $3 (in $0.25 increments). If the maximum Total Variable Cost the bakery can handle is $30,000, Then what are the possible ranges of Unit Labor Cost and Unit Material Cost.
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