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Sara has two booth rental options at the county fair where she plans to sell her new product. The booth rental options are: Option 1:
Sara has two booth rental options at the county fair where she plans to sell her new product. The booth rental options are: Option 1: $750 fixed fee, or Option 2: 30% of all revenues generated at the fair. The product sells for $50 per unit. She is able to purchase the units for $18 each and she pays $2 per unit for shipping. 1-Calculate the break even quantity for both options. 2-At what sales quantity dose Sara makes the same operating income under both options? 2- Expected sales for next year is 80 units. Calculate the following for option 1; a- Operating leverage b - Margin of safety in units
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