The Next Two Questions Are Based On The Following Informatio

The Next Two Questions Are Based On The Following Informationjane Wan

The next two questions are based on the following information. Jane wants to set up a photo shop. The cost to rent an office is $150 per week. The variable cost of making one photo is $20 and she can sell it for $50.

Question 1 (5 points): Jane has to sell _ photos _ per week to break even. (Please only enter an integer and include no units.)

Question 2 (5 points): If Jane sells 10 units, her profits would be _ dollars _. (Please only enter an integer and include no units.)

Paper For Above instruction

Jane aims to establish a photo shop with fixed and variable costs and a set selling price, and the objective is to determine the number of photos she needs to sell to break even and the profit for a specific sales volume.

To analyze the break-even point, we need to consider the fixed weekly rent, variable cost per photo, and selling price per photo. The fixed cost per week is $150, and for each photo produced and sold, the variable cost is $20, with a selling price of $50. The contribution margin per photo is thus $30 ($50 - $20). The break-even quantity (Q) can be calculated using the formula:

Break-even quantity (Q) = Fixed Costs / Contribution Margin per unit

Substituting the given values:

Q = $150 / $30 = 5 photos

Therefore, Jane needs to sell 5 photos per week to reach her break-even point.

For the profit when 10 units are sold, first compute the total revenue and total costs:

Total Revenue = 10 photos x $50 = $500

Total Variable Costs = 10 x $20 = $200

Total Fixed Costs = $150

Total Costs = Fixed Costs + Variable Costs = $150 + $200 = $350

Profit = Total Revenue - Total Costs = $500 - $350 = $150

Hence, if Jane sells 10 units in a week, her profit would be $150.

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