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Denise runs an auto detailing shop. She charges $45 for her standard detailing. The soap, wax, and other supplies cost $5 per car detailed. She

  1. Denise runs an auto detailing shop. She charges $45 for her standard detailing. The soap, wax, and other supplies cost $5 per car detailed. She pays rent on a shop on Busy Street, utilities, insurance, accounting fees, etc. of $8,000 per month.
    1. If she does all the work (no other labor costs involved) how many cars does she have to detail each month to break even?
    2. Assume Denise can detail one car per hour, that she is open eight hours per day for an average of 26 days per month and that she has all the demand she can meet (i.e., she has enough customers to keep busy all the time). How much does she make in profit each month?
    3. Assume Denise finds a different location (Slow Street) such that her monthly fixed costs are now $4,000 per month. How many cars does she need to detail to breakeven?
    4. Use the same assumptions in part B except that she only has enough demand on Slow Street to detail six cars per day (at 26 days per month). How much does she make in a month?
    5. If Denise paid someone $15 per car to do detailing for her, what would be her gross margin on cars that her employee detailed?
    6. How many cars would she need to have detailed each month to break even if all the cars were done by employees like those in part E and she keeps the shop on Busy Street?
    7. Assume that Denises shop on Busy Street (with fixed costs of $8,000 per month) could hold four cars at once and she employed four people to detail at the terms in part e (above). Also, assume they could each detail eight cars per day 26 days per week and that there was enough demand to keep them all busy. If Denise did not do any of the detailing how much money would she make each month?
    8. What would you choose if you were Denise? Why?

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