Break-Even Case #2
- Due Feb 21, 2023 at 11:59pm
- Points 4
- Questions 2
- Time Limit None
Instructions
GIVE ME A BREAK
Directions: Read the following situation and calculate breakeven in units and in dollars.
You are the fundraising chairperson for your class. Your class plans to sell senior sweatshirts as a fundraiser this year. Remember, the break-even formula is: BP = FC ÷ VCM
The fixed costs associated with the fundraiser include: one-time charges of art ($45), screen and set-up ($60), and advertising ($50 for a newspaper ad). In addition, the unit cost of the sweatshirt will be $16.50 per sweatshirt, with an additional charge of $.50 per shirt for shipping and individual plastic wrap. You plan to sell the sweatshirts for a retail price of $22.
Hint: You need to figure out Total Fixed Costs and Variable Cost Margin first (you do NOT need to do all 6 steps)