Reference no: EM132524941

John Pitman runs a small business specialising in delivering organic fruit and vegetables to the local area. He buys from local farms and packages these together in boxes and delivers them locally. Each box is sold for $12. He has the following costs

Direct wages are $9 per hour (30 minutes per box on average)

Fruit and vegetables are $4 per box

Other fixed costs incurred each year are as follows:

$Rent of delivery van4,500

Rent of premises10,500

Advertising2,000

Question 1: Calculate the marginal cost of producing one box of vegetables.

Question 2: State the formula for break-even in boxes (units)

Question 3: Calculate the break-even point in boxes (unit)

Question 4: Examine the factors that influence the setting of the price of a box of fruit and vegetables.