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Is this answer correct? Post your answers on the DQ 4 Discussion Board to the following questions: - Assume you are going to start a
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Post your answers on the DQ 4 Discussion Board to the following questions: - Assume you are going to start a business selling iced tea and that it takes 11 tea bags and one lemon for two quarts of the beverage. Assume whatever other costs you think will be incurred to get the beverage into the hands of a customer and that you will be selling this through a stand on your front lawn. How many quarts of iced-tea will you have to sell to earn your dream salary for the first year? (Pick your own salary and estimated costs). - Identify what costs are fixed and variable in your situation. |Dream salary: $100,000 Cost of 11 tea bags and one lemon: $2.625 Cost of one quart: - Direct material cost: \$1.3125 - Ice cubes: \$0.525 - Labor cost: $1.05 Total variable cost per quart: $2.8875 Fixed costs: - Maintenance expense: $840 - Cups: $7875 Total fixed costs: $8715 Contribution margin: \$0.1125 Number of quarts to sell to reach dream salary: ($100,000+$8715)/$0.1125=889,565 I would need to sell 889,565 quarts of iced tea to earn a dream salary of $100,000 per year, while covering my costStep by Step Solution
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