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Question 13 (8 points) Sandra has developed a new product that she has decided to produce and market. Sandra has found a small building
Question 13 (8 points) Sandra has developed a new product that she has decided to produce and market. Sandra has found a small building to rent for $1,500 a month that will house the production facilities. One major piece of equipment that will be used to manufacture the product will be rented for $800 a month. Sandra purchased all of the other needed tools which will last for two years and depreciation expense on them will be $200 per month. Material costs to make the product are estimated at $3 per unit. Sandra will be paying $5,500 per month to herself as her salary for her work. Monthly advertising costs for the product are estimated at $1,000. Sandra is planning to pay $2 commission for sale of each unit. Sandra is planning to sell each unit of her new product for $20 each. Compute the number of units that Sandra has to make and sell each month to breakeven.
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