Sarah's Bakery produces custom cakes for special occasions. The bakery sells each cake for $35, and the variable cost per cake is $20. Sarah incurs $15,000 in fixed costs each year. How many cakes will Sarah need to sell this year if she wants to earn $40,000 in operating income?
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- The owner of a small local flea market rents tables to vendors every Sunday. His only expense is the purchase of the building in which the flea market operates at a cost of $450,000. The owner expects to rent about 20 tables per week (1000 per year), and wishes to receive a 12% annual return on his investment in the building. What gross margin (in dollars) should the owner use?Mohan, an artist, wants to know how many caricatures he must sell to realize a yearly profit objective of $30,000. Each caricature sells for $20 and costs $5 in materials to make. The fixed costs for Mohan’s studio are $30,000 per year. A distribution chain for hotel room art includes the artist, a wholesaler, the hotel chain, and the individual hotel franchise owner. The artist sells each painting to the wholesaler for $80, realizing a 75% margin on the selling price. The wholesaler sells the art to the hotel chain for a 50% margin. The hotel chain then sells the art to its individual hotel franchise owners, and earns a 20% margin. If the cost for the artist to produce each painting doubles due to a shortage in canvas, what is the new cost to the hotel franchise owner if every member of the distribution chain maintains the same DOLLAR margin?Becca wants to save $900 per quarter for 3 years towards the purchase of an appliance. She feels that she can earn 5.42% compounded quarterly for this period of time. If she starts immediately, what is the most expensive appliance that she can purchase?
- Xavi sells seashore paintings. His annual Fixed Costs are $1,000 and the Variable Costs are $8 per painting. Xavi is considering advertising his artwork in a local gallery, the cost of which is $80 per month. What would be the new annual breakeven revenue (in dollars) if he continues to sell his pieces for $15?Claire wants to buy a new jacuzzi. The jacuzzi costs $$1550. Claire decides to finance the jacuzzi for 24 months at an APR of 13.5%. Determine Claire's monthly payment. Round your answer to the nearest cent, if necessary.Chauhan Restaurant is considering the purchase of a soufflé maker that costs $10,100. The soufflé maker has an economic life of 6 years and will be fully depreciated by the straight-line method. The machine will produce 1,700 soufflés per year, with each costing $2.80 to make and priced at $4.75. The discount rate is 12 percent and the tax rate is 25 percent. What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
- Mary Smith owns and operates BlossomCakes, a bakery that creates personalized birthday cakes for a child's first birthday. The cakes, which sell for $40 and feature an edible picture of the child, are shipped throughout the country. A typical month's results are as follows: Sales revenue $760,000 Variable expenses 570,000 Contribution margin 190,000 Fixed expenses 105,000 Operating income $85,000Chauhan Restaurant is considering the purchase of a soufflé maker that costs $11,100. The soufflé maker has an economic life of 8 years and will be fully depreciated by the straight-line method. The machine will produce 1,600 soufflés per year, with each costing $2.80 to make and priced at $4.75. The discount rate is 12 percent and the tax rate is 25 percent. What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPVSteve Scooter plans to sell a standard scooter for $500 and chrome scooter for $650. Steve purchases the standard scooter for $150 and the chrome for $250. Steve's expect to sell one standard scooter for every three chrome. Steve's monthly fixed costs are $263000 How many of each scooter must Sever sell each month to break even? How many of each scooter would Steve need to sell each month to earn $697000?
- Sally is considering opening up a lemonade stand to earn some spending money over the summer. She estimates each glass of lemonade will cost her $1 to prepare for sale. What does she need to sell it for in order to make $1.50 of gross profit on each glass?avi sells seashore paintings. His annual Fixed Costs are $1,000 and the Variable Costs are $8 per painting. If Xavi sells his paintings for $15, and sells 50 paintings per year more than his breakeven volume, what is his average cost per painting?Sergey is selling many townhomes in Silicon Valley. To buy one of them, every month Valentina deposits $455 in a Capital One high-yield online savings account with an APR of 10.7 % (with monthly compounding). Given this information, in _____________ years that Capital One account will have the $37,000 balance Valentina needs to buy one of Sergey’s townhomes.
