Chris is going to make monogrammed polar fleece scarves and sell them for $10.00 each. His fixed costs of $860 include a sewing machine and a cell phone. In order to produce 30 scarves Chris will spend $100 on a bolt of fabric, $2.95 on a spool of thread, 54 on packaging and $60 on labor all of which are variable costs The first thing that Chris must do is find out the cost of producing one scarf. List expenses (fabric) (tread) (packaging) (labor) Total expenses total expenses of scarves Wwwww cost per scarf Next, Chris needs to find out how many scarves he needs to sell to break-even. Customers are willing to pay $10 per scarf. Break-even Formula: foxed costs (Revenue/unit-Variable costs/unit) Chris now knows that he needs to sell Chris can now make some other decisions. scarves to break-even in this business. # of units needed to sell to break-even How can he reduce his operating expenses? (Buy a used sewing machine, give up the cell phone) What will be the effect if he uses a cheaper fabric to make the scarves? What will happen if he increases his price per scarf? Will he lose customers? Chris can sell 500 scarves. How much profit will he make on the scarves?