# Question: Lisa Dunkley operates a sales booth in computer software trade

Lisa Dunkley operates a sales booth in computer software trade shows, selling an accounting software package, Abacus. She purchases the package from a software company for $150 each. Booth space at the convention hall costs $8,000 per show.

Required

a. Sales at past trade shows have ranged between 200 and 400 software packages per show.

Determine the average cost of sales per unit if Ms. Dunkley sells 200, 250, 300, 350, or 400 units of Abacus at a trade show. Use the following chart to organize your answer. Is the cost of booth space fixed or variable? Round your computation to 2 decimal points.

b. If Ms. Dunkley wants to earn a $45 profit on each package of software she sells at a trade show, what price must she charge at sales volumes of 200, 250, 300, 350, or 400 units?

c. Record the total cost of booth space if Ms. Dunkley attends one, two, three, four, or five trade shows. Record your answers in the following chart. Is the cost of booth space fixed or variable relative to the number of shows attended?

d. Ms. Dunkley provides decorative shopping bags to customers who purchase software packages. Some customers take the bags; others do not. Some customers stuff more than one software package into a single bag. The number of bags varies in relation to the number of units sold, but the relationship is not proportional. Assume that Ms. Dunkley uses $30 of bags for every 50 software packages sold. What is the additional cost per unit sold? Is the cost fixed orvariable?

Required

a. Sales at past trade shows have ranged between 200 and 400 software packages per show.

Determine the average cost of sales per unit if Ms. Dunkley sells 200, 250, 300, 350, or 400 units of Abacus at a trade show. Use the following chart to organize your answer. Is the cost of booth space fixed or variable? Round your computation to 2 decimal points.

b. If Ms. Dunkley wants to earn a $45 profit on each package of software she sells at a trade show, what price must she charge at sales volumes of 200, 250, 300, 350, or 400 units?

c. Record the total cost of booth space if Ms. Dunkley attends one, two, three, four, or five trade shows. Record your answers in the following chart. Is the cost of booth space fixed or variable relative to the number of shows attended?

d. Ms. Dunkley provides decorative shopping bags to customers who purchase software packages. Some customers take the bags; others do not. Some customers stuff more than one software package into a single bag. The number of bags varies in relation to the number of units sold, but the relationship is not proportional. Assume that Ms. Dunkley uses $30 of bags for every 50 software packages sold. What is the additional cost per unit sold? Is the cost fixed orvariable?

## Answer to relevant Questions

Rohr Training Services (RTS) provides instruction on the use of computer software for the employees of its corporate clients. It offers courses in the clients’ offices on the clients’ equipment. The only major expense ...Grant Computer Services, Inc., has been in business for six months. The following are basic operating data for that periodRequireda. What is the average service revenue per hour in each month and the overall average for the ...Cooper Company’s production and total cost data for two recent months follow:Requireda. Separately calculate the depreciation cost per unit and the factory supplies cost per unit for both January and February.b. Identify ...Faber Company, a merchandising firm, reported the following operating results:Requireda. Reconstruct the income statement using the contribution margin format.b. Calculate the magnitude of operating leverage.c. Use the ...The Dickerson Amusement Park is considering signing a contract to hire a circus at a cost of $3,000 per day. The contract requires a minimum performance period of one week. Estimated circus attendance is as ...Post your question