Ajay Singh plans to offer gift-wrapping services at the local mall during the month of December. Ajay will wrap each package, regardless of size, in the customer's choice of wrapping paper and bow for a price of $3. Ajay estimates that his variable costs will total $1 per package wrapped and that his fixed costs will total $600 for the month. Required: a. Express Ajay's profit before taxes in terms of the number of packages sold. b. How many packages does Ajay need to wrap to break even? c. How many packages must Ajay wrap to earn a profit of $1,400?
Ajay Singh plans to offer gift-wrapping services at the local mall during the month of December. Ajay will wrap each package, regardless of size, in the customer's choice of wrapping paper and bow for a price of $3. Ajay estimates that his variable costs will total $1 per package wrapped and that his fixed costs will total $600 for the month. Required: a. Express Ajay's profit before taxes in terms of the number of packages sold. b. How many packages does Ajay need to wrap to break even? c. How many packages must Ajay wrap to earn a profit of $1,400?
Chapter1: Introduction To Finance For Entrepreneurs
Section: Chapter Questions
Problem 6SEP
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General accounting
Transcribed Image Text:Ajay Singh plans to offer gift-wrapping services at the local mall
during the month of December. Ajay will wrap each package,
regardless of size, in the customer's choice of wrapping paper and
bow for a price of $3. Ajay estimates that his variable costs will
total $1 per package wrapped and that his fixed costs will total
$600 for the month.
Required:
a. Express Ajay's profit before taxes in terms of the number of
packages sold.
b. How many packages does Ajay need to wrap to break even?
c. How many packages must Ajay wrap to earn a profit of $1,400?
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