ANSWER: BREAK - EVEN QUANTITY for MT 1685 BREAK - EVEN QUANTITY for GTC 187

ANSWER: $4212

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Instead of spending the additional advertising expenses of $1,000 to increase monthly income generated from its single product Milk Tea (MT), another option is for the company to introduce a new product, green tea cake (GTC), to boost sales/profit. Additional information related to the additional product plan Planned selling price of cake - $6.50/ slice Variable cost is $25/ per cake; 10 slices per/cake New product shared most of the current fixed costs. The company planned to spend additional advertising expenses of $500/ month to promote the business. The break-even quantity of MT \& GTC respectively per month is 2520 and 280 respectively 1685 and 187 respectively 2250 and 28 respectively The expected monthly income generated based on expected sales of the 2 products is $4150 $5,800 $4212 A company is evaluating the feasibility of starting a new business with a single product. The owner planned to operate the business for 28 days per month and open daily for 10 operating hours