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In: Finance

​(​Break-even point and operating leverage​) Footwear Inc. manufactures a complete line of​ men's and​ women's dress...

​(​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 selling price 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 to reach the​ break-even point?

c. What would be the​ firm's profit or loss at the following units of production​ sold:

6 comma 000

pairs of​ shoes?

12 comma 000

pairs of​ shoes?

15 comma 000

pairs of​ shoes?

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 5 months ago
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