80.2K

Verified Solution

Link Copied!

Mailings

Review

The manager of Sami D$\text{'}$s Soft Pretzels has reviewed the monthly operating costs for the first year of operations. Her costs ranged from $$50,500$ for $16,250$ pretzels to $$66,250$ for $21,500$ pretzels.

Using the high$-$low method, calculate the variable cost per pretzel.

Using the high$-$low method, calculate the total fixed costs

Write the cost equation and calculate the operating costs for $1,500,3,000,$ and $5,000$ pretzels. $($remember$,$ email and ask if you don't understand$)$

Draw a graph using graph paper illustrating your total cost under this plan. Please use the picture at the end of these instructions as a guide. Label the axes, and show your costs at $1,500,3,000,$ and $5,000$ pretzels. You will need to calculate revenues at $3$ points of volume as well. There is a checklist at the end of the document to make sure you include all required aspects on your graph. Watch the video provided on BlackBoard for additional help

Calculate the breakeven point if each pretzel sells for $$3\mathrm{.}50.($double check this point is occurring on your graph. If not, double check your lines$)$

$**$ Show your equation here $**$

Include on the graph $($each with a different color and identified on the key$/$legend$.$ Each line should show the $3$ plots used to draw the line.$)$:

Total Revenue Line

Total Cost Line

Fixed Cost Line

Break Even Point

Shaded Profit area

Shaded Loss area

Answer & Explanation Solved by verified expert

See Answer