Texts: Sweaters Are Us is a new company that will produce hand-knit sweaters. Each of the company’s six partners has designed three different sweaters. They have made up samples of each design and have determined that, on average, the sweaters each take about seven and a half hours to knit. Materials cost per sweater average $19. The partners have decided that initially they will work for only $8 per hour, in anticipation of reasonable profits in the future. They intend to sell the sweaters directly to consumers through craft fairs. They have budgeted $7,000 to cover the various costs associated with participation in craft fairs (book rental, display costs, travel expenses, etc).
a. The partners at Sweaters Are Us have made careful estimates of market potential and sales potential for their products. They estimate that demand at Sweaters Are Us for 2020 will be at least 1000 sweaters. What is the lowest price they should charge in order to break-even?
b. The partners want to make 25% profit on cost. What price should they set to achieve that objective?
c. How many sweaters do they need to sell at the price you just calculated in order to break even? Please answer all the parts with steps and formulas.