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I just need the indifference point answer. The Treat Factory Factory plans to open a new retail store in Casper, Wyoming. The store will sell
I just need the indifference point answer.
The Treat Factory Factory plans to open a new retail store in Casper, Wyoming. The store will sell specialty cupcakes for $5 per cupcake (each cupcake has a variable cost of $2.) The company is negotiating its lease for the new store. The landlord has offered two leasing options: 1) a lease of $5,000 per month; or 2) a monthly lease cost of $2,000 plus 10% of the company's monthly sales revenue. Requirements 1. 2. If the Treat Factory Factory plans to sell 4,000 cupcakes a month, which lease option would cost less each month? Why? If the company plans to sell 7,200 cupcakes a month, which lease option would be more attractive? Why? Requirement 1. If the Treat Factory Factory plans to sell 4,000 cupcakes a month, which lease option would cost less each month? Why? Begin by calculating the indifference point. Select the equation to determine the indifference point unit) Abbreviations used: FC = Fixed costs VCU : Variable costs per (VCU (option 1) x Units) + FC (option 1)(VCU (option 2) x Units) + FC (option 2) The indifference point is cupcakesStep by Step Solution
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