Q1- Sarah, the CEO of a manufacturing company, decided to expand the product offering of her business to include the manufacture of a specific model automotive unit. To include this product, her business would incur fixed costs of $370,000 per year and variable costs of $6 per unit. She plans to sell each unit for $80.

a. Calculate the number of units she would have to manufacture to break even.

Round up to the next whole number

b. While manufacturing the unit, she realized that an additional fixed cost of $3,000 per year was required, and also realized that to be more competitive in the market she had to drop the selling price by 20%. What is the new break-even volume? Q2- Olga was planning to set up a business where she would purchase paintings for $1,100 per unit and sell them for $1,700 per unit. She wanted to conduct a break-even analysis and identified the following costs for running her business: $4,490.00 per month for store leasing, $54 per month website hosting fee, $5,000 per month for staff salary, $2,030 per month for advertising costs, and $26 per unit for labour charges to pack the paintings.

a. How many paintings would she have to sell per month to break even? Round up to the next whole number

b. If she wants to make a profit of $24,000 in a month, how many paintings would she have to sell? Round up to the next whole number