Anna operates a consignment shop where she sells cloths for women and children. The average number of consignments sold per month is 1000. The average material cost and the selling price of each consignment are $8 and $20, respectively.
The monthly fixed costs to run this business are given below:
Rental cost: $750Utilities: $150Advertising: $35Insurance: $100Labor cost: $4,000
Using a spreadsheet model, construct a one-way data table with number of consignments sold per month as the column input and profit as the output. Breakeven occurs when profit goes from a negative to a positive value. Vary the number of consignments sold per month from 400 to 1,200 in increments of 100. In which interval does breakeven occur?Use the appropriate Excel tool to find the exact breakeven point.?
What will be an ideal response?
a.
Breakeven point occurs in the interval of 400 to 500 consignments sold per month.
b.
The breakeven point is approximately 420 consignments.
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