Please explain the answer. 1 Your friend is planning to open their own daycare center. They asked you tohelp them review their financial numbers. Friend has provide you with thefollowing monthly informationUnit Variabe costLunch and snacks$100 Per childEducational suppliesOther supplies75 Per child$25 Per childFixed costRent$ 2,000 MonthlyUtilities300 Monthly$300 Monthly$ 2,500 MonthlyInsuranceSalariesMisc$500 MonthlyMonthly fee per child$600 (Selling Price)RequiredAssume that friend has an monthly target income before taxes of$4,000. Prepare a worksheet to determine the number ofchildren that would be required to attend each month toattain their target income.

Break-even analysis is a technique used widely by the production management. It helps to determine the units to be sold to recover the total cost. It also helps to set the price of the product. Break-even analysis includes contribution margin, break-even, profit volume ratio etc.Total selling price = 600 Total variable cost per unit = 100 + 75 + 25 = 200 Total Fixed cost = 2,000 + 300 + 300 + 2,500 + 500 = 5,600 Desired sale = ( Fixed cost + Target profit ) / ( Sale price - Variable cost per unit ) =( 5,600 + 4,000 ) / ( 600 - 200 ) = 24 Childeren Working