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Problem 2: CVP Karen Birk, a local florist, operates a retail store in Columbia, MO. She sells three types of arrangements: .Basic flower bouquet for
Problem 2: CVP Karen Birk, a local florist, operates a retail store in Columbia, MO. She sells three types of arrangements: .Basic flower bouquet for $20 Deluxe flower bouquet for $25 Flower baskets for $38 . . In previous months, her unit sales have been about 300 basic, 200 deluxe, and 500 baskets. Her variable cost for each of the arrangements are $12 for basic, $15 for deluxe, and $22.80 for the baskets. Her landlord downtown is changing her rental options, and Karen must choose from the following Option 1: keeping her current location and paying a fixed rent of $15,000 per month, or Option 2: moving to a new location at the mall and paying a base rent of $9,000 plus 10% of revenue received, or Options 3: going farther away into a new complex and paying a base rent of $4,800 plus 20% of revenue received up to a max rent of $25,000 per month. Karen needs to know answers to the following questions: 1) What is breakeven under the three scenarios for Karen? 2) Karen believes her sales will stay the same under Option 1, her sales will increase by 5% under Option 2, and her sales will decrease by 10% under Option 3. Show her income statements under each and recommend one of the options for Karen
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