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Homework: Homework 2 Question 11, E7- 36A (final answer) Part 5 of 6 HW Score: 73.33%, 36,67 of 50 points Points: 1.67 of 5
Homework: Homework 2 Question 11, E7- 36A (final answer) Part 5 of 6 HW Score: 73.33%, 36,67 of 50 points Points: 1.67 of 5 Save Wax Art plans to open a new retail store in Waterville, Maine. The store will sell specialty candles for an average of $30 each. The average variable costs per candle are as follows: . Wax $5 . Other additives $3 . Base $2 The company is negotiating its lease for the new location. The landlord has offered two leasing options: Option A) a lease of $2,700 per month; or Option B) a monthly lease cost of $1,500 plus 10% of the company's monthly sales revenue. The company expects to sell approximately 350 candles per month. Requirement 2. At what level of sales (in units) would the company be indifferent between the two lease options? Show your proof The indifference point is 400 candles. Show your proof. (Consider only the foxed and vanable costs related to the lease options. Complete all input cells. Enter a "0" for zero balances) %/ Total fixed expenses 0 Total variable expenses Total lease costs Coloufotor Option A Option B 2700 1500 D 2700 Clear all Check answer
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