Audubon Advisors is a volunteer student organization that uses business skills theyve learned in their MBA program to advise local charity groups about business decisions. One charity group is planning to make and sell cutting boards at a major cooking show. The boards cost $6 each to make and will sell for $20 each. The boards will be made by volunteers at the show and all materials not used can be returned. That is, the group will make only the number of boards it can actually sell. The cooking show allows three options for groups selling at the show:

A. Pay a fixed booth fee of $5,600

B. Pay a fee of $3,800 plus 10% of all revenue from the boards sold at the show

C. Pay 25% of all revenues from boards sold at the show.

1. Compute the CM per board under each of the three options.

2. Compute the breakeven point in number of boards for each of the three options.

3. Which payment plan has the lowest risk of loss for the charity group? Why?

4. Which payment plan has the highest profit potential assuming that there is very high demand for the boards? Why?