# PS1 - PS1 Problem Set 1 Chapter 1(pg 20 14 Gina Fox has...

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PS1 Problem Set 1 Chapter 1 (pg 20) 14. Gina Fox has started her own company, Foxy Shirts, which manufactures imprinted shirts for special occasions. Since she has just begun this operation, she rents the equipment from a local printing shop when necessary. The cost of using the equipment is \$350. The materials used in one shirt cost \$8, and Gina can sell these for \$15 each. a. If Gina sells 20 shirts, what will her total revenue be? What will her total variable cost be? b. How many shirts must Gina sell to break even? What is the total revenue for this? Equipment \$ -350 Fixed Cost Shirt Cost \$ - 8 Potential Variable Cost Factor Shirt Value \$ 15 Potential Revenue Factor a. 20 * 15 = \$300 Total Revenue 20 * 8 = \$160 Total Variable Cost b. Units Sold Cost Revenue Profit 0 -350 0 -350 5 -390 75 -315 10 -430 150 -280 15 -470 225 -245 20 -510 300 -210 25 -550 375 -175 30 -590 450 -140 35 -630 525 -105 40 -670 600 -70 45 -710 675 -35 50 -750 750 0 55 -790 825 35 60 -830 900 70 BEP = 50 units Total Revenue = \$750

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PS1 19. Farris Billiard Supply sells all types of billiard equipment, and is considering manufacturing their own brand of pool cues. Mysti Farris, the production manager, is currently investigating the production of a standard house pool cue that should be very popular. Upon analyzing the costs, Mysti determines that the materials and labor cost for each cue is \$25, and the fixed cost that must be covered is \$2400 per week.
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