Karen hefner a florist operates retail stores in several

Reference no: EM13481612

Karen Hefner, a florist, operates retail stores in several shopping malls. The average selling price of an arrangement is $50 and the average cost of each sale is $30. She also pays a manager $7,500 per month. A new mall is opening where Karen wants to locate a store, but the location manager is not sure about the rent method to accept. The mall operator offers the following three options for its retail store rentals:

1. paying a fixed rent of $17,500 a month, or

2. paying a base rent of $10,000 plus 10% of revenue received, or

3. paying a base rent of $5,500 plus 20% of revenue received

Required:

Calculate the break-even in units under each option.
Calculate the net income under each option assuming that units sold are 5,000.
Which option should Karen choose?Support your answer.

	Option 1	Option 2	Option 3
Break-Even in Units
Net Income

Reference no: EM13481612

Questions Cloud

Compute the break-even point in dollars under each of the : gorham manufacturings sales slumped badly in2010. for the first time in its history it operated at a loss. thecompanys

Advance programming hi i want two copies of the assignment : hi ltbrgti want two copies of the assignment me and my friend are doing same assignment. ltbrgtwe need both the

Cost of goods completed was 2370000 and cost of goods sold : acme corporation began 2007 with 115000 of rawmaterial inventory 250000 of work-in-process inventory and98000 of

For each of the situations that follow determine whether a : for each of the situations that follow determine whether a liability should be reported on the balance sheet. if a

Karen hefner a florist operates retail stores in several : karen hefner a florist operates retail stores in several shopping malls. the average selling price of an arrangement is

During the last year of operations accounts receivable : during the last year of operations accounts receivable increased by 10900 accounts payable increased by 5900 and

Determine ending inventory and cost of goods sold assuming : arts craft shop had the followingacquisitions of inventory during the most recent yeareventunitsunit costtotal

Which of the following statements is correct answer one : which of the following statements is correct? answer one defect of the irr method is that it does not take account of

If the company implements a total quality managemnetprogram : a corporation is trying to determine how long it takes for oneproduct to pass through the production process. the

User Account

All Pages