Case Scenario 2

Calvins Cost/Revenue Model is shown below:

1. Rent will be $500.00/month
2. Calvin wanted to earn $2,000/month in Salary
3. Calvins variable costs for each computer search that he did was around $10.00/search
4. Calvin thought he could charge his clients $60.00/search, and therefore undercut the pricing of his competitors.

Question #4 (5 points)

Explain the formula for Breakeven point in Sales Dollars.

Question #5 (10 points)

Calculate the number of computer searches Calvin will have to do each month to break even.

Show your work.