Wax Art plans to open a new retail store in Biddeford, Maine. The store will sell specialty candles for an average of $$15$ each.

View the average variable costs per candle.

Requirements

Which lease option is more attractive for the company under its current

sales expectations? Calculate the total lease cost under:

Option A

Option B

s expectations? Calculate the total lease cost under Option A and Option B$.$

At what level of sales $($in units$)$ would the company be indifferent between

the two lease options? Show your proof.

If the company's expected sales were $750$ candles instead of the projection

listed in the exercise, which lease option would be more favorable for

the company? Why?

Average variable costs per candle

Wax $$5$

Other additives $$3$

Base $$2$

Two Leasing Options

Option A$)$ a lease of $$2,800$ per month; or

Option B$)$ a monthly lease cost of $$1,450$ plus $20\%$ of the company's monthly sales revenue.