Question

Jessica wants to start making and selling bracelets using colorful beads and thread. She starts collecting information to come up with a business model. She finds out that she will have to pay $250 in rent per month. Her phone and Internet costs will be $40 per month. The material cost per bracelet will be $1.25, and a helper will charge $0.25 per bracelet. Jessica plans to make 200 bracelets in the first month. Jessica’s fixed monthly cost is $, and her variable cost is $per bracelet. To break even she will have to sell the bracelets for $.

Answer 1

Cost per month = 250 + 40 =290
Variable cost = 1.25 + 0.25 = 1.5 per bracelet

200 bracelets

At breakeven
Cost = Gain
290 + 200*1.5 = 200*x
Where x = bracelet price
x = (290+300)/200
x = 301.45$ per bracelet