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?

(F) Fixed Cost= $350.00

(V) Variable Cost= $8.00

(S) Selling Price= $15.00

(X) Number of Units Sold= 20

Revenues = (S)(X) = (15)(20) = $300.00

Total Variable Cost = (V)(X) = (8)(20) = $160.00

If Gina sells 20 shirts her total revenue will be $300.00 and her total variable cost will be $160.00.

(b) How many shirts must Gina sell to break even? What is the total revenue for this?

(F) Fixed Cost= $350.00

(V) Variable Cost= $8.00

(S) Selling Price= $15.00

(X) Number of Units Sold= ?

BEP=> 0=sX-f-vX X=

X=

X= 50

Total Revenue = (S)(X) = (15)(20) = $750.00

Gina must sell 50 shirts to break even and she would have total revenue of $750.00.

Problem 1-17

Katherine D’ Ann is planning to finance her college education by selling programs at the football games for State University. There is a fixed cost of $400 for printing these programs, and the variable cost is $3. There is also a $1,000 fee that is paid to the university for the right to sell these programs. If Katherine was able to sell programs for $5 each, how many would she have to sell in order to break even?

(F) Fixed Cost= $1,400.00

(V) Variable Cost= $3.00

(S) Selling Price= $5.00

(X) Number of Units Sold= ?

BEP=> X=

X=

X= 700

In order to break even selling each program for $5, Katherine would have to sell 700