Rubber dog Toys has been losing money. The company is selling 52,000 rubber ducks a week at a price of $0.50 each. Labor and materials costs are $19,760 per week. Rent and insurance are $10,000 per week. And the company pays its bank $4,000 per week to cover interest and principle on a loan used to buy the plastic molding equipment used in the factory. The owner knows he is losing money each week and wants to know whether he should shut down immediately. Answer each of the following questions:
Calculate Rubber Dog’s weekly profit or loss.
What are Rubber Dog’s weekly costs? What portion ($ amount) of those are fixed and what portion are variable?
Given your answer to parts (a) and (b), should Rubber Dogs shut down immediately? Explain
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