Query Company sells pillows for $25.00 each. The manufacturing cost, all variable, is $10 per pillow. The company is planning on renting an exhibition booth at the annual crafts and art convention. The convention coordinator allows three options for each participating company. They are:
1. paying a fixed booth fee of $5,010, or;
2. paying an $4,000 fee plus 10% of revenue made at the convention, or;
3. paying 20% of revenue made at the convention.
Required:
a. Compute the break-even sales in pillows of each option.
b. Which option should Query Company choose, assuming sales are expected to be 800 pillows?
c. Calculate the margin of safety for Option 1 if sales are expected to be 300 pillows.

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The Answer of Query Company sells pillows for $25.00 each. The manufacturing cost, all variable, is $10 per pillow. The company is planning on renting an exhibition booth at the annual crafts and art convention. The convention coordinator allows three options for each participating company. They are:
1. paying a fixed booth fee of $5,010, or;
2. paying an $4,000 fee plus 10% of revenue made at the convention, or;
3. paying 20% of revenue made at the convention.
Required:
a. Compute the break-even sales in pillows of each option.
b. Which option should Query Company choose, assuming sales are expected to be 800 pillows?
c. Calculate the margin of safety for Option 1 if sales are expected to be 300 pillows.

Query Company Sells Pillows for $25