Question
Samuel Linkletter is an importer of clay gardening pots. He has a six-month agreement with a local gardening store, West City Gardening, to set up
Samuel Linkletter is an importer of clay gardening pots. He has a six-month agreement with a local gardening store, West City Gardening, to set up a display to sell his product. Samuel can return any unsold items at no cost. The average selling price for the pots is $18 and on average, they cost Samuel $7 each. The owner of West City Gardening has proposed two options:
1. A fixed payment of $375 per month
2. A fixed payment of $125 per month; and, 20% of sales revenues earned during the term of the agreement
What number of units must be sold to generate the same operating income for both options?
(ROUND UP YOUR ANSWER TO THE NEAREST WHOLE NUMBER)
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