Exercise 1. Packets of socks made by Oliver & Hardy company are sold to consumers for $2.49. Retailers ear 27% on the retail selling price. Wholesalers typically earn 25% mark-up on their cost of goods.

What is the manufacturer's selling price? To manufacture and market this product Oliver & Hardy incurs fixed costs (FC) of $10,000 and unit variable cost (UVC) of $1.00 per packet.

How many packets must Oliver & Hardy produce to break even?