Problem:
Footwear inc. manufactures a complete line of men's and women's dress shoes for independent merchants the 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.
Requirement:
Question 1: What is the dollar sales volume the firm must achieve to reach the break-even point?
Question 2: What would be the firm's profit or loss at the following units of production sold: 7,000 pairs of shoes? 9,000? 15,000?
Note: Please show how you came up with the solution.