Barrell Racer Betty has decided to make and sell custom saddles. She was able to...
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Barrell Racer Betty has decided to make and sell custom saddles. She was able to rent a workshop/garage in an industrial park for $5,000 a month, which includes all utilities, and she already owns the equipment and tools she needs. She anticipates being able to sell her saddles for $2,000 each. The raw materials (leather, wood, etc.) will cost an average of $800 for each saddle, and he plans to spend $200 sales commission per saddle to the regional tack shops who have agreed to sell them to the public.
Assuming these are all the costs and revenues, what will be Bettys monthly break-even point in units? Does this seem like a reasonable amount for her to produce and sell every month? Please show your calculations.
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