Assume you have decided to buy an advertisement in the local newspaper to publicize your new photography business. The cost of the ad is $6700. You have decided to charge $135 per photo shoot, and your variable costs are $45.
a. What is your contribution per unit?
b. How many photo shoots do you need to break even on the cost of the ad?
c. What is your break-even point if you charge $155 per shoot?