?(?Break-even
point and operating
leverage?)
Footwear Inc. manufactures a complete line of? men's and?women's dress shoes for independent merchants. The average sellingprice of its finished product is
?$85
per pair. The variable cost for this same pair of shoes is
?$60
.
Footwear Inc. incurs fixed costs of
?$180 comma 000
per year.
a. What is the? break-even point in pairs of shoes sold for the?company?
b. What is the dollar sales volume the firm must achieve toreach the? break-even point?
c. What would be the? firm's profit or loss at the followingunits of production? sold:
6 comma 000
pairs of? shoes?
12 comma 000
pairs of? shoes?
15 comma 000
pairs of? shoes?
