Karen Hefner,a Florist,operates Retail Stores in Several Shopping Malls

Karen Hefner,a florist,operates retail stores in several shopping malls.The average selling price of an arrangement is $30 and the average cost of each sale is $18.A new mall is opening where Karen wants to locate a store,but the location manager is not sure about the rent method to accept.The mall operator offers the following three options for its retail store rentals:
1.paying a fixed rent of $15 000 a month,or
2.paying a base rent of $9000 plus 10% of revenue received,or
3.paying a base rent of $4800 plus 20% of revenue received up to a maximum rent of $25 000.
Required:
a.For each option,calculate the break-even sales and the monthly rent paid at break-even.
b.Beginning at zero sales,show the sales levels at which each option is preferable up to 5000 units.
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Correct Answer:

Verified

a.Option 1 N = Break-even units
$30N - $...

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