What would be the indifferent point

Assignment Help Accounting Basics
Reference no: EM13546717

Tasty Treats plans to open a new retail store in Medina, Ohio. Tasty Treats will sell specializing cupcakes for $5 per cup cake.(Each cupcake has a variable cost of $2). The company is negotiating its least for the new Medina location. The landlord has offered two leasing options,1) lease of $2500 per month, or 2) A monthly lease cost of $900 plus 10% of the company monthly sales revenue.

Requirements:
1. If Tasty Treats plans to sell 2400 cupcakes a month, which lease option would cost each month? Why?
2. If the company plans to sell 4,400 cupcakes a month, which lease option would be more attractive? Why?

Beginning calculating the indifferent point.
VCU (option1)x units +FC (option 1) = VCU (option 2) x units + FC (option 1)

What would be the indifferent point?

Reference no: EM13546717

Questions Cloud

How large could the plant be without having the ground : A 35 percent-efficient coal-fired power plant with effective height of 100 m emits SO2 at a rate of 0.6 lb/10^6 Btu into the plant. If winds are assumed to be 4 m/s at the stack height and just over 3 m/s at 10 m
The total selling expenses for the month of january : What are the total selling expenses for the month of January?
Prove clausius inequality in steam power plant operating : Prove clausius inequality in steam power plant operating in cycle.given that heat transfer in boiler =2070kJ/kg at 164 degree celcius ;heat tranfer in condenser =1905 kJ/kgat 52 degree celcius.
Bad debt expense for the year balance : Bad debt expense for the year balance in the allowance account after the adjustment of Dec 31
What would be the indifferent point : What would be the indifferent point?
Discuss the capital budgeting process : Discuss the capital budgeting process and the inputs that are used in capital budgeting.
Clay was extracted from a soil sampling tube to form : Clay was extracted from a soil sampling tube to form a cylindrical sample 100 mm in diameter and 100mm in length.the sample was weighed in its natrual moist state and found to have a total mass of 1531g
Prepare companys journal entry to record the notes issuance : Prepare the company's journal entry to record the note's issuance, prepare the journal entries for the first and second installment payments
Prepare a report for the firm ceo indicating : Prepare a report for the firm's CEO indicating which projects should be accepted and why

Reviews

Write a Review

Accounting Basics Questions & Answers

  Determine the amount of overhead cost that would be

murri corporation has an activity-based costing system with three activity cost pools-processingsupervising and

  Why should the responsibility for related transactions

Why should the responsibility for related transactions be divided among different departments or individuals?

  Prepare the journal entries for the original purchase

On October 5, 500 shares of the Birch Company stock were sold for $35 per share less a $50 brokerage fee. Prepare the journal entries for the original purchase, dividend, and sale.

  Special termination benefits

On November 1, Prince Vacuum Company offered special early retirement benefits to those employees who were eligible. This program was in effect until year-end. Prince should recognize a liability and an expense related to these special termination..

  Working with straight line depreciation

Leah, Inc. has machinery with a cost of $100,000. The machinery has an estimated useful life of 10 years, and an estimated salvage value of $10,000. The machinery is expected to be able to produce a total of 1,000,000 units during its estimated li..

  How many hours of overtime will jeff earn

If Jeff worked 55 hours, how many hours of overtime will Jeff earn?

  Prepare a retained earnings statement for the year ended

Prepare an income statement for the year ended December 31,2009. Prepare a retained earnings statement for the year endedDecember 31, 2009

  Why gold will use newly acquired machine in same manner

Gold's machine had an original cost of $70,000, accumulated depreciation to date of $34,500, and a fair market value of $60,000. Cowboy's machine had a book value of $45,000 and a fair value of $53,000.

  On what does the market supply of labor depend

What is the effect of the real-wage rate level on the quantity of labor supplied in the market?

  From the e-activity compare and contrast the cause and

cause and effectbull from the e-activity compare and contrast the cause and effect of at least one cost driver in the

  What type of lease is this to walden be specific and

walden company leases manufacturing equipment from preston rentals co. on january 1 2012. the following data pertain to

  Effective interest rate on the loan

Knique Shoes issued a 100,000, 8 month, noninterest-bearing note. The loan was made by Second Commercial Bank whose stated discount rate is 9%. The effective interest rate on this loan (rounded) is:

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd