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SKATE AROUND Case: You are providing assistance to an entrepreneur planning to start a new business. You are being asked to check the feasibility of
SKATE AROUND
Case: You are providing assistance to an entrepreneur planning to start a new business. You are being asked to check the feasibility of renting inline skates to individuals and small groups. To determine this, you need to calculate the breakeven point in unit and dollar sales for the year based on the following projections:
Rent$ Insurance$
Equipment loan payment nonskate$ Utilities electric phone, water$ Wages and salaries$
Advertising$
Each pair of inline skates will cost the business $ The first years inventory will consist of pairs.
The projected average sale is $ per rental. With a sixdayaweek operation, your group projects an average rental of pairs a day, producing sales of $ per week.
Questions:
How much are total fixed costs?
How much are total variable costs?
What is the variable cost per unit?
What is the variablecost margin?
What is the breakeven point in units?
What is the breakeven point in dollars?
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