You are thinking of opening a small copy shop. It costs $5500 to rent a copier for a year, and it costs $0.03 per copy to operate the copier. Other fixed costs of running the store will amount to $450 per month. You plan to charge an average of $0.10 per copy, and the store will be open 365 days per year. Each copier can make up to 100,000 copies per year.a) For a charge per copy between $0.07 to $0.11 and daily demands of 500, 1000, 1500, and 2000 copies per day, find annual profit. That is, find annual profit for eachof these combinations of charge per copy and daily demand.b) If you charge 0.09 per copy, what daily demand for copies will allow you to break even?c) Graph profit as a function for a charge per copy (between $0.07 to $0.11) for a daily demand of 500 copies; for a daily demand of 2000 copies. Interpret your graphs and label your graphs properly

The Break-even point is where the company incurs no profit or loss. It analyzes the number of units…

Answered: a) For a charge per copy between $0.07…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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You are thinking of opening a small copy shop. It costs $5500 to rent a copier for a year, and it costs $0.03 per copy to operate the copier. Other fixed costs of running the store will amount to $450 per month. You plan to charge an average of $0.10 per copy, and the store will be open 365 days per year. Each copier can make up to 100,000 copies per year.

a) For a charge per copy between $0.07 to $0.11 and daily demands of 500, 1000, 1500, and 2000 copies per day, find annual profit. That is, find annual profit for eachof these combinations of charge per copy and daily demand.
b) If you charge 0.09 per copy, what daily demand for copies will allow you to break even?

c) Graph profit as a function for a charge per copy (between $0.07 to $0.11) for a daily demand of 500 copies; for a daily demand of 2000 copies. Interpret your graphs and label your graphs properly

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