Question
The Silver Swords is a company that makes chef knives. They sell the knives for $45 each. Manufacturing cost is $15 per knife; marketing costs
The Silver Swords is a company that makes chef knives. They sell the knives for $45 each. Manufacturing cost is $15 per knife; marketing costs $3 per knife and must pay 20% of the selling price as a fee to an online platform they sell the knives on. Fixed Cost of the business is $35000 and the capacity is 6000 knives.
a) Compute the break-even point as a percent of capacity.
b) Compute the break-even point in dollars.
c) What is the company's profit if they sell 3500 knives?
d) What is the maximum fixed cost they can pay, if the price they can charge drops to $35.
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