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# E what conclusions about the operating breakeven

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Unformatted text preview: LG1 12–6 Breakeven analysis Molly Jasper and her sister, Caitlin Peters, got into the novelties business almost by accident. Molly, a talented sculptor, often made little figurines as gifts for friends. Occasionally, she and Caitlin would set up a booth at a crafts fair and sell a few of the figurines along with jewelry that Caitlin made. Little by little, demand for the figurines, now called Mollycaits, grew, and the sisters began to reproduce some of the favorites in resin, using molds of the originals. The day came when a buyer for a major department store offered them a contract to produce 1,500 figurines of various designs for \$10,000. Molly and Caitlin realized that it was time to get down to business. To make bookkeeping simpler, Molly had priced all of the figurines at \$8.00. Variable operating costs amounted to an average of \$6.00 per unit. In order to produce the order, Molly and Caitlin would have to rent industrial facilities for a month, which would cost them \$4,000. a. C...
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