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' ... ve III. Popcorn Wagon Problem: We are deciding whether to sell popcorn in the SSS lobby to raise funds. If we proceed, we will rent a popcorn wagon at a cost of $15 for the day. The materials cost (popcorn, oil, and salt) to pop a batch of popcorn is about $0.50. Each batch yields 8 bags of popcorn. We will sell the popcorn for $1.00 per bag. Any unsold popped popcorn will be thrown away at the end of the day (at zero cost to ourselves, the environment, etc.) There is no labor cost associated with operating the popcorn wagon. a. What is our average cost per bag sold if we pop one batch of popcorn and sell all 8 bags? What is our average cost per bag sold if we pop two batches and sell all 16 bags? What is our average cost per bag sold if we pop three batches and sell all 24 bags? b. What is the break-even point (number of bags of popcorn sold) in the decision as to whether or not to rent the popcorn wagon? (HINT: You should not try to simply use the break-even point formula with the information presented. Rather you should apply your understanding of what the formula does to find the solution.) C. Suppose if is 4:00 p.m. and we have just run out of popped corn. We will leave at 5:00 p.m., so any popcorn popped would need to be sold within the next hour, or it will just be thrown away. What is the break-even point (number of bags of popcorn sold) required to justify popping a batch of popcorn at this point in time? d. Does your answer to part c above depend on how much popcorn we have already sold today? (For example, suppose for some reason we rented the popcorn wagon, but for some reason didn't get to the SSS lobby until 4:00?) Explain