CVP On Your Own #$2$

On$-$the$-$Go $($OTG$)$ is a convenience store with $100$ locations across the U$.$S$.$ The CFO of OTG Trey Trammel, is considering offering new products$/$services at OTG locations.

Trammel is considering offering a money order service, much like a bank would offer. He's hoping it would bring additional customers into the store, who may buy other items while there.

Decisions to add products or services can be complex. The following information is available to help you determine if OTG should begin selling money order services at its stores.

The cost of renting the money order machine is $$\frac{30}{?}$ month$/$store$.$ The average real estate lease for each store is $$\frac{5000}{?}$ month $($that includes all land, the convenience store building, and attached gas pumps$).$ ve

FC

OTG would have to pay a $$\mathrm{.}05$ processing fee for each money order that's processed at its locations. Competition $($local banks$)$ typically charge customers $$.\frac{99}{?}$ money FC order processed; OTG would like to charge $$\mathrm{.}79$ for each money order to bring in more business and undercut the competition.

Money order processing would also take longer at the registers, at approximately $60$ seconds per money order; typical transactions take $30$ seconds at the register. The average pay for each clerk is $$\frac{12}{?}$ hour, but OTG doesn't plan to hire any additional workers due to the increase in processing time for money order transactions.

a$)$ MONEY ORDERS: How many money orders does each OTG location need to sell per month to break even?

BEP$=\frac{FC}{CM}$

$CM=SP-ve$

b$)$ MONEY ORDERS: How many to earn a profit on money orders of $$150$ for the month?