MGMT 1010 In-class Activity: Controlling - Breakeven Analysis Team Members Names: Breakeven Analysis Calculations - Complete each of the examples below and write the answers in the spaces provided. Please show your work. FC Eric wants to start a car detailing business but is unsure how many cars he will need to detail before making a profit. His cousin has offered to let him use a small section of his shop for only 5400 per month. Erice is going to pay his friend $10/hour to help him. (Hint: this is a variable cost) He has estimated his additional expenses to be the following: Insurance $150/month His share of monthly utilities $110 Wax (will yield 10 cars) $16.00 Thint: do the math to find out how much wax for one vehicle is!) Towels, soap, and other supplies $2.75/vehicle Leasing of equipment $100/month Marketing $125/month budgeted He estimates that it will take 4 hours to detail a vehicle if he has help from his friend. He plans to charge $90 each. How many vehicles does Eric need to detail each month to breakeven? Eric is now considering leaving his full-time job to grow his car detailing business but does not want to lose his salary. If he decides to pay himself $2000 per month how many cars does he have to detail in a month now to breakeven? Are these numbers attainable? Please explain. List two suggestions you could give Eric that would affect his breakeven point and recalculate the breakeven point based on your sugestions and recommendations Recommendation #1: Recommendation #2