In this scenario, what would the break even point be?
The rental of a small facility will be $2,200 per month, insurance $500 per month, and other fixed costs are estimated at $1,300 per month. In this facility, she will be able to produce 100 toys per month at a variable cost for each toy of $5.00. She plans to sell them for $30 each.
The rent for a larger facility will be $5,000 per month, insurance $1,000 per month, and other fixed costs are estimated at $2,580 per month.
In this facility, she will be able to produce 400 toys per month at a variable cost for each toy of $4.00. She plans to also sell them for $30 each.