Loulou K.

asked • 11/18/20

How many calendars would the company need to sell if the total profits from each option are to be equal?

"After exploring both options, we have determined that the quality and deliverability time will be identical in each case. Calendars will sell for €15 each. Printing calenders though a 3rd party will cost €11 per calendar. Purchasing a facility will cost €100,000 including all one-time expenses.

Costs of printing in house are:

·        Ink €0.30 per page

·        Paper €0.10 per page

·        Binding €2.00

·        Each calendar has 1 binding and 15 pages, each with a photo

·        Labor costs are €1.00 per calendar

How many calendars would the company need to sell if the total profits from each option are to be equal?"

1 Expert Answer

By:

Marc L. answered • 11/18/20

Tutor
New to Wyzant

Helping others understand things one step at a time

Loulou K.

Thank you. But I feel a little confused. Total price per calendar in house should be 9. 0.30 ink *15. +0.10*15 for paper. Binding 2 and labor cost is 1.total 9. Also could you please explain how did you get 6.02 and 10.02? thank youuuu
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11/18/20

Marc L.

Ahh I see what you're saying, so yes the new cost for ink per calendar should be 15*.3=4.5, 10.2 is profit per paper - cost per calendar (15-4.8 at the time, the cost is different now that there is more ink used) and 6.2 came from 10.2C - 4C
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11/18/20

Loulou K.

So with new detail, what is the final results please? I am sorry to be a pain
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11/18/20

Loulou K.

3rd party will sell calendar for 15. Cost 11 and profit is 9. How did you get 10.2 etc please?
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11/18/20

Marc L.

You're fine, so since my cost was off by 4.2 we can take that off of the 10.2 so we are down to 6C, now we do 6C-4C to get 2C=100000, C=50,000 calendars
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11/18/20

Loulou K.

6 is profit from 3rd party and 4 profite from in-house right?
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11/18/20

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