John is planning to start a new business selling handmade candles. He has estimated the following...

  

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John is planning to start a new business selling handmade candles. He has estimated the following costs and pricing information for his venture: • Rent for a small workshop: $1,000 per month • Utilities: $200 per month • Candle making equipment rental: $500 per month • Cost of materials per candle: $5 • Labor cost per candle: $2 • John will spend his time making the candles and promoting the business. His current job pays $4,000 per month. Advertising and marketing expenses. $500 per month. Required: 1. Calculate the total fixed cost. 2. Calculate the total variable cost per candle. 3. If John's maximum production capacity is 500 candles per month, what should be the selling price per candle to break even? 4. If John wants to earn a profit equal to his current salary, how much should he sell each candle for? 5. What is the fixed cost per candle for maximum production? 6. What is the total variable cost for maximum production? 7. If John sets the selling price at $12 per candle for maximum production and manages to reduce the fixed cost by 10%, what is the new profit? 8. If John sets the selling price at $12 per candle for maximum production and manages to reduce the variable cost by 10%, what is the new profit? 9. If John sets the selling price at $12 per candle for maximum production and manages to reduce the total cost by 10%, what is the percentage increase in profit? 10. If John offers buy one get one free candle at price of 25$ with no change to the original cost, what will be the new profit for maximum production? John is planning to start a new business selling handmade candles. He has estimated the following costs and pricing information for his venture: • Rent for a small workshop: $1,000 per month • Utilities: $200 per month • Candle making equipment rental: $500 per month • Cost of materials per candle: $5 • Labor cost per candle: $2 • John will spend his time making the candles and promoting the business. His current job pays $4,000 per month. Advertising and marketing expenses. $500 per month. Required: 1. Calculate the total fixed cost. 2. Calculate the total variable cost per candle. 3. If John's maximum production capacity is 500 candles per month, what should be the selling price per candle to break even? 4. If John wants to earn a profit equal to his current salary, how much should he sell each candle for? 5. What is the fixed cost per candle for maximum production? 6. What is the total variable cost for maximum production? 7. If John sets the selling price at $12 per candle for maximum production and manages to reduce the fixed cost by 10%, what is the new profit? 8. If John sets the selling price at $12 per candle for maximum production and manages to reduce the variable cost by 10%, what is the new profit? 9. If John sets the selling price at $12 per candle for maximum production and manages to reduce the total cost by 10%, what is the percentage increase in profit? 10. If John offers buy one get one free candle at price of 25$ with no change to the original cost, what will be the new profit for maximum production?

Answer rating: 100% (QA)

1 Total Fixed Cost Rent 1000 Utilities 200 Equipment rental 500 Advertising and marketing expenses 500 Total Fixed Cost 1000 200 500 500 2200 2 Total Variable Cost per Candle Cost of materials per can... View the full answer