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# Karen Hefner, a florist, operates retail stores in several shopping malls. The average selling price

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6 years ago
Karen Hefner, a florist, operates retail stores in several shopping malls. The average selling price of an arrangement is $30 and the average cost of each sale is$18. A new mall is opening where Karen wants to locate a store, but the location manager is not sure about the rent method to accept. The mall operator offers the following three options for its retail store rentals:
1.   paying a fixed rent of $15,000 a month, or 2. paying a base rent of$9,000 plus 10% of revenue received, or
3.   paying a base rent of $4,800 plus 20% of revenue received up to a maximum rent of$25,000.

Required:
a.   For each option, compute the breakeven sales and the monthly rent paid at break-even.
b.   Beginning at zero sales, show the sales levels at which each option is preferable up to 5,000 units.
Textbook

## Cost Accounting

Edition: 14th
Authors:
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cyborgcyborg
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6 years ago

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 This solved my problem perfectly, thank you for your kind input.
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 Cool! No problem.
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 Thank you!
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 Thanks
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