Question: Lecture Exercise #5 Andre is investigating setting up a crepe stand on campus. He has two options: 1. He could rent space in the student

Lecture Exercise #5 Andre is investigating

Lecture Exercise #5 Andre is investigating setting up a crepe stand on campus. He has two options: 1. He could rent space in the student union (which costs $300/month in rent and overhead) His materials and labor costs are $1 per crepe, and the sale price is $4 per crepe. 2. He could use a portable crepe maker from a friend and set up a booth outside the union. He'd have no rent or other general overhead costs (i.e., no fixed costs), but his friend would demand $1.50 per crepe sold (in addition to materials and labor). Questions: (a) What is the break-even point for each of the two options? (b) An informal survey shows that Andre could expect to sell 350 crepes/month. Which option should he select

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!