1.) It costs a beekeeper $2.42 to make each pint jar of honey, and she sells the

Question

1.) It costs a beekeeper $2.42 to make each pint jar of honey, and she sells the jars to stores at a price of $3.51 each (netting $1.09 per pint jar). Her other monthly costs are the lease of the land and building $980, general supplies and equipment $185, utilities $270, transportation $300 and fixed salaries $6300. The monthly break even point for the number of pints made and sold (to the nearest integer) is 7372. The beekeeper then decides to give herself a raise amounting to $50 per month.

1.) What is the monthly break even point (to the nearest integer) after the change? Answer: _____________

Explanation / Answer

Total fixed cost after raise = 980+185+270+300+6300+50

                                        =8085

Contribution per unit = 1.09

Breakeven point after the raise = Total fixed cost after raise / Contribution per unit

                                               = 8085/ 1.09

                                                = 7417 jars

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