Query Company sells pillows for $25.00 each. The manufacturing cost, all variable, is $10 per pillow. The company is planning on renting an exhibition booth for both display and selling purposes at the annual crafts and art convention. The convention coordinator allows three options for each participating company. They are:
1.paying a fixed booth fee of $5,010, or
2.paying an $4,000 fee plus 10% of revenue made at the convention, or
3.paying 20% of revenue made at the convention.
Required:
a.Compute the breakeven sales in pillows of each option.
b.Which option should Query Company choose, assuming sales are expected to be 800 pillows?

Question

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The Answer of Query Company sells pillows for $25.00 each. The manufacturing cost, all variable, is $10 per pillow. The company is planning on renting an exhibition booth for both display and selling purposes at the annual crafts and art convention. The convention coordinator allows three options for each participating company. They are:
1.paying a fixed booth fee of $5,010, or
2.paying an $4,000 fee plus 10% of revenue made at the convention, or
3.paying 20% of revenue made at the convention.
Required:
a.Compute the breakeven sales in pillows of each option.
b.Which option should Query Company choose, assuming sales are expected to be 800 pillows?

Query Company Sells Pillows for $25