Boswells Beanery

is a locally-owned specialty food product company in Northeast Ohio that has been in existence for over thirty years. Its products include flavored coffees and teas, dips, dressings, sauces, and seasonings. The company attends a variety of craft and other shows throughout the year and sets up a booth at each show to sell its products. Free samples are offered to show attendees and the Boswells booth is always packed. Shows that Boswells attends include the Yankee Peddler Festival in Canal Fulton, Ohio, theGreat Big Home + Garden Show at the Cleveland I-X Center, and the Ohio Mart.at Stan Hywet in Akron, Ohio. Boswells also sells its products online via its website.

Each of the shows that Boswells attends has a different booth rental fee. Booth rental fees can range from $350 to $5,000 for each show.

Assume that Boswells has an average contribution margin ratio of 40% on its products.

Question: Would the booth rental fee be considered a fixed cost or a variable cost? Assume that 100,000 people visit the home and garden show each year spread evenly throughout the ten-day period. If 5% of the attendees purchase from Boswells at the show, how much must each customer purchase from Boswells for Boswells to break even on the booth rental fee?