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Roman and Clive have a plan to manufacture barbeque grills. They are writing their business plan for Roman & Clive Grills in order to get investors and have put together the following costs:Rent: $10,000/monthPackaging: $7 per grillEquipment: $75,000Staff Salaries: $12,000/monthAssembly and manufacturing labor: $16/hourRaw materials: $100/grillUtilities: $1,000/monthOutsourced painting: $30/grillInsurance: $5,000/yearScrap rate on raw materials and packaging: 1%Time to manufacture and assemble 1 grill: 90 minutes
a.What are RC Grills fixed costs?
b.What are RC Grills total variable costs per unit?
c.Comparable grills are priced at $300. If RC Grills matches that price and hopes to breakeven their first year, how many do they need to make and sell? (Breakeven point is where Fixed costs + variable costs = revenue, meaning the point where revenue covers exactly both fixed and variable costs with no profit.)
d.Assuming their workers work a typical 40 hours work week and are allowed three weeks off for vacation and holidays, how many assemblers must they hire?
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