Dakota Gold sells gold bracelets for $40 each. The manufacturing cost (all variable)is $12 per bracelet. The company is planning to rent an exhibition booth to display and sell the jewellery in a kiosk at a popular tourist spot. Tourism management allows three options for each kiosk vendor. They are:
-Pay a fixed booth fee of $40,000.
-Pay a $33,600 fee plus 10% of all revenue from candy sold at the snack bar.
-Pay 25% of all revenue from merchandise sold at the kiosk.
a)Compute the breakeven sales in units for each option.
b)Which option should Dakota Gold choose, assuming sales are expected to be 2,000 bracelets per month?
c)At what level of sales in units should the company be indifferent between options 2 and 3?
d)Which option has the highest risk of loss for the organization? Explain.

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The Answer of Dakota Gold sells gold bracelets for $40 each. The manufacturing cost (all variable)is $12 per bracelet. The company is planning to rent an exhibition booth to display and sell the jewellery in a kiosk at a popular tourist spot. Tourism management allows three options for each kiosk vendor. They are:
-Pay a fixed booth fee of $40,000.
-Pay a $33,600 fee plus 10% of all revenue from candy sold at the snack bar.
-Pay 25% of all revenue from merchandise sold at the kiosk.
a)Compute the breakeven sales in units for each option.
b)Which option should Dakota Gold choose, assuming sales are expected to be 2,000 bracelets per month?
c)At what level of sales in units should the company be indifferent between options 2 and 3?
d)Which option has the highest risk of loss for the organization? Explain.

Dakota Gold Sells Gold Bracelets for $40 Each