Mark is very interested in beach sand in Florida. He wants to start a business selling jars of beach sand to tourists. His sales price per jar is $2.50 and estimated costs are: Jar Cap Label Sales commission to retailers Excavating machine rent Mark's salary (President) $.40 per item $.10 per item $.30 per item $.20 per item $500 per month $1,000 per month 1. a. What is Mark's breakeven point for the year, in terms of both quantity and sales dollars on a pretax basis? b. Mark wants to make a target profit of $25,000 before taxes for the year. How many jars of beach sand would he need to sell? c. If Mark can generate revenues of $50,000, what is his margin of safety in both dollars and sales quantity for the year? d. If Mark generates revenues of 50,000 what is his operating leverage for the year? 2. Mark is concerned about a potential slowdown in tourism. He wants to run some scenarios and figure out what changes he may need to make to become profitable. Prepare total year 2024 income statements for the following scenarios (one column per scenario): a. Sales of beach sand are 750 jars per month with current cost structure. This column should be labelled "Base case"; b. Mark uses a cheaper label and jar, reducing those costs 20% each. Sales are at 750 units per month. Call this column (scenario) "lower costs". c. Mark takes no salary. Call this scenario "no salary". Sales remain at 750 jars per month. d. Mark wants to run an optimistic scenario showing what profits will be if sales increase to 1,250 per month. Call this scenario "higher sales". Keep the same cost structure as the base case. 3. Conclusion. Should Mark open this business? Be detailed and state your reasons logically. Summarize your results in a table as follows:

Mark is very interested in beach sand in Florida. He wants to start a business selling jars of beach sand to tourists. His sales price per jar is $2.50 and estimated costs are: 1. a. What is Mark's breakeven point for the year, in terms of both quantity and sales dollars on a pretax basis? b. Mark wants to make a target profit of $25,000 before taxes for the year. How many jars of beach sand would he need to sell? c. If Mark can generate revenues of $50,000, what is his margin of safety in both dollars and sales quantity for the year? d. If Mark generates revenues of 50,000 what is his operating leverage for the year? 2. Mark is concerned about a potential slowdown in tourism. He wants to run some scenarios and figure out what changes he may need to make to become profitable. Prepare total year 2024 income statements for the following scenarios (one column per scenario): a. Sales of beach sand are 750 jars per month with current cost structure. This column should be labelled "Base case"; b. Mark uses a cheaper label and jar, reducing those costs 20% each. Sales are at 750 units per month. Call this column (scenario) "lower costs". c. Mark takes no salary. Call this scenario "no salary". Sales remain at 750 jars per month. d. Mark wants to run an optimistic scenario showing what profits will be if sales increase to 1,250 per month. Call this scenario "higher sales". Keep the same cost structure as the base case. 3. Conclusion. Should Mark open this business? Be detailed and state your reasons logically. Summarize your results in a table as follows