Springer Sports Company manufactures ultra-lite badminton rackets. The rackets are sold exclusively via Internet. Each racket sells for $20 ($16 plus $4 shipping and handling.) Springer's contribution margin ratio is 60%. Springer calculates breakeven units to be 4,000 per month.

1. What is the unit variable cost of a badminton racket?

2. What is Springer's monthly fixed cost?

3. Suppose Springer introduces an offer for "free" shipping and handling. How many additional rods will Springer have to sell each month to break even?

Answer rating: 100% (QA)

1 Unit Variable Cost of a Badminton Racket Contribution Margin Ratio Selling Price Var... View the full answer