Question :
The Marbury Stein Shop sells steins from all parts of the world. The owner of the shop, Clint Marbury, is supposing of expanding his operations by hiring college students, on a commission basis, to sell steins at the local college. The steins will bear the school emblem.
These steins have to be ordered from the manufacturer three months in advance, and because of the exclusive emblem of each college, they can't be returned. The steins could cost Marbury $15 each with a minimum order of 200 steins. Any additional steins could have to be ordered in increments of 50.
Because Marbury's plan could not need any additional facilities, the only costs related with the project could be the cost of the steins and the cost of sales commissions. The selling price of the steins could be $30 each. Marbury would pay the students a commission of $6 for each stein sold.
Required:
1.
To prepare the project worthwhile in terms of his own time, Marbury would need a $7,200 profit for the first six months of the venture. What level of sales in units and dollars would be needed to attain this target net operating income?
Sales level in units steins
Sales level in dollars $
2.
Consider that the venture is undertaken and an order is placed for 200 steins. What could be Marbury's break-even point in units and in sales dollars?
Break even point in units?
Break even point in sales dollars?