You have devised a plan to provide cleaning services for local theaters. You pla

Question

You have devised a plan to provide cleaning services for local theaters. You plan to charge $20 to clean each facility. The method you plan to use requires leasing equipment costing $200 per month, but would require a labor cost of $10.00 per theater. If you want to earn a profit of at least $500 per month, what are the minimum numbers of theaters you must clean? Please explain your answer Answer a. 70 b. 50 c. 20 d. 35 You have devised a plan to provide cleaning services for local theaters. You plan to charge $20 to clean each facility. The method you plan to use requires leasing equipment costing $200 per month, but would require a labor cost of $10.00 per theater. If you want to earn a profit of at least $500 per month, what are the minimum numbers of theaters you must clean? Please explain your answer 70 50 20 35 a. 70 b. 50 c. 20 d. 35

Explanation / Answer

Hi,

Please find the answer as follows:

You can use below mentioned formula to calculate the number of theaters:

Number of theaters = Fixed Cost + Desired Profit/ Selling Price - Variable Cost

Fixed Cost = 200 (lease cost)

Desired Profit = 500

Selling Price = 20

Variable Cost = 10

Using these values in the above formula, we get

Number of theaters = (200+500)/(20-10) = 70 theaters.

Answer is 70 theaters. Option A is correct.

Thanks.

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