Essay
Racer Industries has fixed costs of $900,000. Selling price per unit is $250 and variable cost per unit is $130.
Required:
a. How many units must Racer sell in order to break even?
b. How many units must Racer sell in order to earn a profit of $480,000?
c. A new employee suggests that Racer Industries sponsor a company 10-K as a form of advertising. The cost to sponsor the event is $7,200. How many more units must be sold to cover this cost?
Correct Answer:
Verified
a. $900,000 / ($250 - 130) = 7...View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Correct Answer:
Verified
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q25: Costs that remain constant in total dollar
Q65: Variable costs are costs that vary in
Q100: Given the following cost data, what type
Q102: The relative distribution of sales among the
Q104: Carter Co. sells two products, Arks and
Q109: (a) If Swannanoa Company's budgeted sales are
Q109: If a business had sales of $4,000,000
Q149: Most operating decisions of management focus on
Q214: The systematic examination of the relationships among
Q225: Companies with large amounts of fixed costs