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Cottage Industries expects to sell 500 baskets a month. The business has the opportunity to rent a basket-making machine. Doing so, would increase the total
Cottage Industries expects to sell 500 baskets a month. The business has the opportunity to rent a | |||||||
basket-making machine. Doing so, would increase the total fixed cost of operating the workshop for a month | |||||||
to $3.000. Using the machine would reduce the labour time to half an hour per basket. | |||||||
The basket makers would still be paid 10$ an hour. | |||||||
a) How much profit would the business make each month from selling baskets? | |||||||
- Without the machine? | |||||||
- With the machine? | |||||||
b) What is the BEP if the machine is rented? | |||||||
- Prepare a revenue and cost schedule. | |||||||
c) What do you notice about the figures that you calculate? | |||||||
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