Footwear Inc. manufactures a complete line of men\'s and women\'s dress shoes fo
ID: 2734521 • Letter: F
Question
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 $90 per pair. The variable cost for this same pair of shoes is $55. Footwear Inc. incurs fixed costs of $180, 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? a. What is the break-even point in pairs of shoes for the company? units b. What is the dollar sales volume the firm must achieve to reach the break-even point? $Explanation / Answer
Answer (A):-
QB = = 180,000/90-55 = 5,142.86 pairs of shoes
Answer (B):-
SB = =180,000/1-(55/90) = 180,000/.389 = $462,724.9