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The Candle Factory plans to open a new retail store in Portland, Maine. The company is negotiating its lease for the new location. The landlord
The Candle Factory plans to open a new retail store in Portland, Maine.
The company is negotiating its lease for the new location. The landlord has offered two leasing options: Option A) a lease of $3,000 per month; or Option B) a monthly lease cost of $1,650 plus 10% of the company's monthly sales revenue. The company expects to sell approximately 250 candles per month. The store will sell specialty candles for an average of $30 each. The average variable costs per candle are as follows:
Wax $6 | |
Other additives $3 | |
Base $3 |
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