Break-Even Analysis and Profit Calculation

a. How many floral arrangements need to be sold to break even?

b. What is the profit or loss if 2,400 units are sold monthly?

c. What is the profit or loss if 3,800 units are sold monthly?

d. How many floral arrangements must be sold to generate a profit of $13,500?

a. To break even, the company must sell how many floral arrangements?

b. What is the profit or loss for 2,400 units sold?

c. What is the profit or loss for 3,800 units sold?

d. How many floral arrangements are needed to achieve a profit of $13,500?

The company producing floral arrangements has fixed costs of $25,300 per month. Each floral arrangement sells for $22 and the variable costs are $5.40 per unit.

The formula for break-even point in units is: Break-Even Point (units) = Fixed Costs / (Sales price per unit - Variable cost per unit).

Plugging in the values: $25,300 / ($22 - $5.40) = 1,500 units (rounded up to the nearest whole number). Therefore, the company must sell 1,500 floral arrangements to break even.

For 2,400 units sold: ($22 * 2,400) - ($5.40 * 2,400) - $25,300 = $17,580 profit.

For 3,800 units sold: ($22 * 3,800) - ($5.40 * 3,800) - $25,300 = $38,580 profit.

The target profit formula is: Target Profit (units) = (Fixed Costs + Target Profit) / (Sales price per unit - Variable cost per unit).

For a profit of $13,500: ($25,300 + $13,500) / ($22 - $5.40) = approximately 2,453 units need to be sold.