Woody’s Widget Shop has the following information: The average widgethas a sales price of $18; raw materials for the widget are $4; it takes30 minutes to assemble one widget; and production labor is paid $8 perhour. Operating expenses are as follows: salaries, $2,500 per week; insurance,$1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.a. How many widgets must be sold each month in order to break even?b. How many dollars in sales does this represent?c. What is the contribution margin for each widget sold?d. If the goal is to make $100,000 profit per month, how many widgets mustbe sold?
Woody’s Widget Shop has the following information: The average widgethas a sales price of $18; raw materials for the widget are $4; it takes30 minutes to assemble one widget; and production labor is paid $8 perhour. Operating expenses are as follows: salaries, $2,500 per week; insurance,$1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.a. How many widgets must be sold each month in order to break even?b. How many dollars in sales does this represent?c. What is the contribution margin for each widget sold?d. If the goal is to make $100,000 profit per month, how many widgets mustbe sold?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Woody’s Widget Shop has the following information: The average widget
has a sales price of $18; raw materials for the widget are $4; it takes
30 minutes to assemble one widget; and production labor is paid $8 per
hour. Operating expenses are as follows: salaries, $2,500 per week; insurance,
$1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.
a. How many widgets must be sold each month in order to break even?
b. How many dollars in sales does this represent?
c. What is the contribution margin for each widget sold?
d. If the goal is to make $100,000 profit per month, how many widgets must
be sold?
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