Compute breakeven sales in number of TV sets of each option

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Reference no: EM131211304

A Company sells TV sets. Sale price per unit is $250 each. The company’s cost to manufacture a TV set is $100 (all variable). Ali, the manager, wishes to rent a display and sale stall at the Armidale Show 2016. The Armidale Show organizer gives the following choices for rent to Ali:

1. A fixed stall charge of $5,010, or

2. A fixed stall charge of $4,000 plus 10% of all sales made at the Show, or

3. 20% of all sales made at the Show, with no fixed charge.

Required: a. Compute the breakeven sales in number of TV sets of each option. b. Which option should Ali choose, assuming sales are expected to be 800 TV sets? Hint: For ‘a’ (all options), denote the number of units required by a letter (say, M, N or O).

Reference no: EM131211304

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