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Compute the breakeven number of tools for each option.




The group sells a set of tools for $20. The manufacturing cost (all variable) is $6 per set.;1. Pay a fixed booth fee of $5,600;2. Pay a fee of $3,800 plus 10% of all revenue from tools sets sold at the show;3. Pay 15% of all revenue from tool sets sold at the show;A. Compute the breakeven number of tools for each option.;B. Which payments have the highest degree of operating leverage?;C. Which payment plan has the lowest risk of loss for the organization? Explain;D. At what level of revenue should the group be indifferent to options 1 and 2?;E. Which option should junior achievement choose, assuming sales are expected to be 1,000 sets of tool? Explain


Paper#25178 | Written in 18-Jul-2015

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