Question
Ali's Wonder Nails does manicure for $45.00 per customer. Ali has found that it costs her business $15 to provide each service. Ali runs this
Ali's Wonder Nails does manicure for $45.00 per customer. Ali has found that it costs her business $15 to provide each service. Ali runs this business from her home and has assigned fixed costs to be $2,000 per month. Required a) Compute the break-even in sales unit. (5 Marks) b) Compute the breakeven in sales dollars. (5 Marks) c) If Ali wants to make a net profit of $500 each month, how many customers should Ali project to serve each month and how much sales in dollars would that generate? (15 Marks) d) If Ali currently serves 90 customers per month, compute the margin of safety in units and dollars. (10 Marks) e) Compute the margin of safety as a percentage. (5 Marks) f) How much will operating income be if Ali serves 110 customers for the month if selling price remains the same but variable costs increased to $20 per customer? (10 Marks)
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