Please Separate Your Answers By The Parts Of The Question.

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Please Separate Your Answers By The Parts Of The Question Note The Please separate your answers by the parts of the question. Note the 250+ word minimum is waived for this assignment. First, let’s try a couple of basic break-even questions. Remember that you can find the break-even point formula in the Week 6 Lecture. Please be sure to “show your work” in your answers to all of the following questions to explain how you got your answers: Emma owns an Internet business where she sells weatherproof car floor mats. Her monthly fixed costs are $50,000. The average price per unit is $25 and the average variable cost per unit is $15. What is her break-even point? Remember that your answer will be in “units,” not “dollars,” as you are finding the number of items that need to be sold in order to break even. Andrew rents rooms in his hotel for an average of $91 per night. The variable cost per rented room is $38. His fixed costs are $59,000 per month. How many rooms does he have to rent per month in order to break even? In this case, when you do the calculations, your answer will not be a whole number – there will be a decimal. In break-even calculations, you must always round your answer up to the next highest whole number, because you cannot sell a fraction of an item. Now, let’s try to break down the various costs business owners have into Fixed Costs and into Variable Costs. You may want to re-read the Lecture and/or the textbook to refresh your memory on this one. Julia owns a sandwich shop and has the following costs each month: Labor costs ($8,000), Insurance ($1,000), Rent ($1,200), Utilities ($500), and the average cost of ingredients/packaging for each sub is $1.17. Julia sells subs for $6 each. How many subs will she need to sell to break even each month based on the costs listed above? In order to make that break-even number more manageable, Julia has found a new distributor that can reduce the ingredient/packaging cost to $0.98 per sub. If all other costs remain

Dr. Jack HW Helper · Accepted Answer

In analyzing the financial sustainability of businesses, understanding the break-even point is vital as it indicates the minimum sales volume required to cover all fixed and variable costs. This paper explores the calculation of the break-even point through various scenarios involving different business models and cost structures. Each case demonstrates the application of the break-even formula and highlights the importance of cost management and strategic pricing in achieving profitability. Part 1: Emma's Internet Business Emma's car mat business incurs fixed monthly costs of $50,000, with each unit priced at $25 and variable costs at $15. The break-even point formula is: Break-even units = Fixed costs / (Price per unit - Variable cost per unit) Applying this, we get: Break-even units = $50,000 / ($25 - $15) = $50,000 / $10 = 5,000 units This indicates Emma needs to sell at least 5,000 units monthly to cover all costs and break even. This calculation demonstrates the relationship between fixed costs, variable costs, and pricing, emphasizing how scaling sales impacts profitability. Part 2: Andrew's Hotel Rooms Andrew rents rooms at an average of $91 per night, with a variable cost of $38 per room and fixed costs of $59,000 per month. The calculation follows the same formula: Break-even units (rooms) = Fixed costs / (Price per room - Variable cost per room) = $59,000 / ($91 - $38) = $59,000 / $53 ≈ 1113.21 Rounding up, Andrew must rent at least 1,114 rooms per month to break even, highlighting the necessity of full occupancy and efficient cost management in hospitality businesses. Part 3: Julia’s Sandwich Shop Julia's costs include fixed costs: Labor ($8,000), Insurance ($1,000), Rent ($1,200), Utilities ($500), totaling $10,700. The variable cost per sub is initially $1.17, with a selling price of $6: Break-even units = $10,700 / ($6 - $1.17) = $10,700 / $4.83 ≈ 2,214.52 Rounding up, she must sell at least 2,215 subs monthly. However, with a new distributor reducing

Please Separate Your Answers By The Parts Of The Question. ✓ Solved

Please Separate Your Answers By The Parts Of The Question Note The

Sample Paper For Above instruction

Part 1: Emma's Internet Business

Part 2: Andrew's Hotel Rooms

Part 3: Julia’s Sandwich Shop

Conclusion

References