The owner of Old-Fashioned Berry Pies, S. Simon, is contemplating adding a new line of pies, which
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Question:
- The owner of Old-Fashioned Berry Pies, S. Simon, is contemplating adding a new line of pies, which will require leasing new equipment for a monthly payment of $6,000. Variable costs would be $2 per pie, and pies would retail for $7 each.
- a. How many pies must be sold in order to break even?
- b. What would the profit (loss) be if 1,000 pies are made and sold in a month?
- c. How many pies must be sold to realize a profit of $4,000? d. If 2,000 can be sold, and a profit target is $5,000, what price should be charged per pie?
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