Question: Abigail is working on a plan of opening a muffin shop at a shop in Romeoville downtown. She is planning to keep it open for all of a month. Her goal is to find out how many muffins should she sell per day. She is planning to sell a muffin for $1.75.
Her costs for the new business are:
Raw Materials $250 per day
Kitchen gas maintenance $25 per day
Fixed costs includes:
Local taxes $500 per month
Liability insurance $750 per month
Rental cost of the shop $1250 per month
Using breakeven formula, help Abigail arrive at the number of muffins she need to sell to break-even. Also, help Abigail by identifying the number of muffins she needs to sell to make a min. profit of $1500 per month. Mary also has an option of renting a different shop for $850 per month. How many muffins should she sell if she opts for this another shop that costs $850 per month?