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The Treat Factory plans to open a new retail store in Medina, Ohio . The store will sell specialty cupcakes for $4 per cupcake (each
The Treat Factory plans to open a new retail store in Medina, Ohio . The store will sell specialty cupcakes for $4 per cupcake (each cupcake has a variable cost of $1.) The company is negotiating its lease for the new store. The landlord has offered two leasing options: 1) a lease of $4500 per month; or 2) a monthly lease cost of $3500 plus 5% of the company's monthly sales revenue.
If the Treat Factory Factory plans to sell 3,000 cupcakes a month, which lease option would cost less each month? Why?
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