Question
Sakura is considering making some floral basket arrangements at home and selling them through shops which are entitled to a commission. A supplier quoted her
Sakura is considering making some floral basket arrangements at home and selling them through shops which are entitled to a commission. A supplier quoted her with a long-term contract at $1.20 per stalk of flower. She will use 7 stalks of flowers for each basket of arrangement. She expects that on average 20% of flowers bought will be spoilt or become unsuitable for her arrangements. Other materials will cost about $3.50 per basket arrangement. The shop next to her home has agreed to display and sell her arrangements but shell have to pay a monthly charge of $300 plus a 10% commission based on sales price. Sakura plans to sell her arrangement at $40 each. Sakura expects that only 70% of her flower arrangements will be sold and unsold arrangements have zero salvage value.
Required
a) How many arrangements must she make per month to earn a profit of $2,100?
b) How many arrangements must she make per month to breakeven? Round up your answer to the nearest integer unit.
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