Query Company Sells Pillows for $25

question 185

Essay

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?

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Definitions:

Suprachiasmatic Nucleus

A small region of the brain in the hypothalamus responsible for controlling circadian rhythms by regulating sleep-wake cycles.

Pacemaker

A pacemaker is a medical device implanted in the chest to help control abnormal heart rhythms by using electrical pulses to prompt the heart to beat at a normal rate.

Hypothalamic Nucleus

A cluster of neurons in the hypothalamus involved in regulating various bodily functions, including temperature, hunger, and hormonal secretion.

EEG Pattern

The characteristic electrical activity of the brain recorded with electrodes placed on the scalp, used in the diagnosis of neurological conditions.