1-15 gina fox has started her own company, foxy shirts, which manufactures imprinted shirts for special occasions. since she has just begun this operation, she rents the equipment from a local printing shop when necessary. the cost of using the equipment is $350. the materials used in one shirt cost $8, and gina can sell these for $15 each.

a. If each shirt can sell for $15, then 20 shirts will give her a revenue of $300. Her variable cost will be 20 * $8 = $160 since the cost of the equipment is a fixed cost.

b. Each shirt Gina sells has a net profit of $7. Therefore, in order to break even, she must make up the cost of the equipment ($350), with a profit of $7 per shirt.

$350/$7 = 50 shirts.

50 shirts * $15 = $750 in revenue.

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