Assignment #1 Capt. 1 exercises 14, 17, 20, 22, 23

Assignment #1 Capt. 1 exercises 14, 17, 20, 22, 23

1-14
Gina Fox has started her own company, Foxy Shirts, which manufactures imprinted shirts for special occasions. Since she has just begun this operation, she rents the equipment from a local printing shop when necessary. The cost of using the equipment is $350. The materials used in one shirt cost $8, and Gina can sell these for $15 each. (a) If Gina sells 20 shirts, what will her total revenue be? What will her total variable cost be? (b) How many shirts must Gina sell to break even? What is the total revenue for this?
The various costs which Gina Fox incurs are; Fixed Cost (cost of using the equipment), FC = $350
Variable Cost (Material cost per short), VC = $8 per shirt and the Selling price of Foxy Shirts, P = $15 per unit

f  350 s  15v  8
Total revenue  20(15)  $300
Total variable cost  20(8)  $160
BEP  f/(s  v)  350/ (15  8)  50 units
Total revenue  50(15)  $750

1-17

Katherine D’Ann is planning to finance her college education by selling programs at the football games for State University. There is a fixed cost of $400 for printing these programs, and the variable cost is $3. There is also a $1,000 fee that is paid to the University for the Right to sell these programs. If Katherine was able to sell programs for $5 each, how many would she have to sell in order to break even?

f  400  1,000  1,400 s  5 v  3
BEP  f/(s  v)  1400/ (5  3)  700 units

1-20
Mysti Farris (see Problem 1-19) is considering raising the selling price of each cue to $50 instead of $40. If this is done while the costs remain the same, what would the new break-even point be? What would the total revenue be at this break-even point?

f  2400 s  50 v  25
BEP  f/(s – v)  2400/ (50 – 25)  96 per week
Total revenue 