Three years ago, Michelle Walker started a business that creates and delivers holiday and birthday gift baskets to students at the local university. Michelle sells the baskets for $34each, and her variable costs are $24per basket. She incurs $15,000in fixed costs each year.

Question B

Last year, Michelle sold4,000baskets, and she believes that demand this year will be stable at4,000baskets. The following are the actions Michelle could take if she wants to earn $27,000in operating income by selling only4,000baskets. Consider each action independently.