Florence is a highly paid fashion consultant who earns $100 per hour. She has 16 hours per day that she can allocate to work or
leisure, and she decides to work for 12 hours. Now suppose one of Florence's clients is featured on the front page of Vague, an influential fashion magazine. As a result, Florence's consulting fee now rises to $500 per hour. Florence decides to work only 10 hours per day. Draw Florence's new time allocation budget line, with income on the vertical axis and hours of leisure on the horizontal axis, and illustrate the indifference curve at her optimal choice. Choose the correct statement.
1 answer:
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Answer:
Sales will be $353333.33
Explanation:
We have given fixed Cost = $ 38,600
Earning Required = $70,000
Contribution margin ratio = 30 %
Hence Contribution Required= Fixed Cost+Earning Required = $70000+$36000 = $106000
We know that contribution margin ratio is given by
Contribution margin ratio
Sales = $353333.333