Wanda wants to open a Health Food Store. Her monthly expenses are rent $3,500, utilities of $1,000,

Question:

Wanda wants to open a Health Food Store. Her monthly expenses are rent $3,500, utilities of $1,000, insurance of $500, and payroll of $4,250. She estimates that her cost of goods is approximately 65 percent of sales. Wanda would like to make $4,000 a month for herself.
a. What is Wanda’s ?
b. How much does she need in monthly sales to break even?
c. How much does she need in monthly sales to make a profit of $4,000?
d. Construct a break-even chart for Wanda's health food store.
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...