Question
Jeff Jamail is evaluating a business opportunity to sell cookware at trade shows. Mr. Jamail can buy the cookware at a wholesale cost of $210
Jeff Jamail is evaluating a business opportunity to sell cookware at trade shows. Mr. Jamail can buy the cookware at a wholesale cost of $210 per set. He plans to sell the cookware for $350 per set. He estimates fixed costs such as plane fare, booth rental cost, and lodging to be $5,600 per trade show.
A Determine the number of cookware sets Mr. Jamail must sell at a trade show to break even (zero profit or loss). Use the following structure to answer this question:
- Determine the amount of the contribution margin per unit.
Sales Price: $350
Variable Cost: $210
Contribution Margin $140
- Calculate the break-even point in units.
- Calculate the break-even point in sales dollars.
B Assume Mr. Jamail desires to earn a profit of $4,900 per show.
- Determine the sales volume in units (sets of cookware) necessary to earn the desired profit.
- Determine the sales volume in dollars necessary to earn the desired profit.
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