storm occurrence services sos offers services to secure houses and properties when m 501206

Storm Occurrence Services (SOS) offers services to secure houses and properties when major storms are forecast for an area. They do such things as fasten plywood over windows, install pumps and generators, trim and brace trees, etc. They keep an inventory of trailers, tools and supplies year round which incur annual maintenance and repair costs. Additional fuel and supplies are purchased locally at the time of the storm preparation. Staff are “on-call” when the storms are forecasted. Financial data is shown below.

Revenue (Price) per storm $500,000 for all customers

Maintenance and storage $440,000 Annual

Supplies per storm $200,000 for all customers

Labor costs per storm $250,000 for all customers

a. What would be the annual profit if there are 6 major storms in a year?

b. How many storm per year are needed to break even (include all costs)?

c. What would the revenue per storm have to be (instead of what is shown above) to attain a profit of

$1,000,000 if there are 10 storms in a year .