Safari Industries makes balls. The fixed costs of operating the workshop for a month is $500. Each ball requires materials that cost $2 and takes one hour to make. The ball maker is paid $10 per hour. The balls are sold to a wholesaler for $14 each and they expect to sale 500 balls a month. To employ a new machine Safari Industries Ltd will increase their fixed cost to $3000 a month but will reduce labour time to half an hour per basket. Ball makers will still be paid $10 per hour.
a. How much profit would the business make each month from selling balls
i. Assuming that ball-making machine is not bought
ii. Assuming that the ball-making machine is bought
b. What is the Break-Even Point if the machine is bought?