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Exotic Roses owned by Margarita Rameriz provides a variety of rose bushes to local nurseries that sell Rameriz' roses to the end consumer (landscapers and retail customers). Rameriz grows the roses from cuttings that she has specifically cultivated for their unusual characteristics (color, size, heartiness and resistance to disease). Margarita's roses are in great demand as evidence by the wholesale price she charges, $15 per potted plant. Exotic Roses has the following cost structure:
Fixed Costs per year Unit Variable Costs
Plant Materials $ 0.50
Pot $0.30
Labor $8 000.00 $0.70
Utilities $9 000.00
Rent $7 500.00
Other $2 500.00
a. How many potted rose plants must Exotic Roses sell to break-even?
b. If Rameriz wants to make operating profits of $10,000, how many potted rose plants must be sold?
c. If Rameriz wants to make an AFTER-TAX profit of $10,000, how many potted rose plants must be sold? The tax rate is 35%.
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