Footwear Inc. manufactures a complete line of men’s and women’s dress shoes for independent merchants. The average selling price of its finished product is $ 85 per pair. The variable cost for this same pair of shoes is $ 58. Footwear Inc. incurs fixed costs of $ 170,000 per year.
a. What is the break- even point in pairs of shoes for the company?
b. What is the dollar sales volume the firm must achieve to reach the break- even point?
c. What would be the firm’s profit or loss at the following units of production sold: 7,000 pairs of shoes? 9,000 pairs of shoes? 15,000 pairs of shoes?