What are Burglars Beware makes custom security storm doors and window guards. The owner, Liza Barker, is considering adding a line of Patio Door guards. Liza estimates that she can purchase the guards at $259 each. The variable cost associated with installing a guard is estimated to be $50 per installation and annual fixed costs are estimated to be $54,000. Liza would like to make a profit of 30 percent on the door guards.
a. Assume Liza has sales of 1,000 door guards in the first year, what is the full cost of a guard and what is the price she should establish for the guards?
b. Assume Liza has sales of only 500 guards. What is the price she should establish for the guards?Show the working in detail step by step.