Kristen and James started a business that manufactures cutting tools. They sell the tools for $75 each.
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Question:
Kristen and James started a business that manufactures cutting tools. They sell the tools for $75 each. Their monthly fixed costs are $3,500 for the building lease and utilities, and $2,900 for salaries. The cost of supplies for each tool is $15.
a. To break even, how many tools do they have to sell every month?
Round up to the next whole number
b. If the cost of supplies for each tool is reduced to $12 and they hire one more person for $2,300 per month, calculate the minimum number of tools that they would have to sell to ensure that they do not incur a loss.
Round up to the next whole number
Related Book For
Accounting for Decision Making and Control
ISBN: 978-0078025747
8th edition
Authors: Jerold Zimmerman
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