The Fancy Shoe company sells shoes for $125 each. Manufacturing cost is $53.40 per shoe; marketing costs are $21.35…

Question:

Transcribed Image Text:

The Fancy Shoe company sells shoes for $125 each. Manufacturing cost is $53.40 per shoe;

marketing costs are $21.35 per shoe; and royalty payments are 15% of the selling price. The fixed

cost of preparing the shoes is $398,000. Capacity is 30,000 shoes.

(A) Compute the break-even point

(i) in units;

(ii) in dollars;

(B) Determine the break-even point in units if fixed costs are increased by $5,300 while

manufacturing cost is reduced by $4.80 per shoe.

(C) In a new situation (ignore question 1(b)), determine the break-even point in units if the selling

price is increased by 12% while fixed costs are decreased by $3,900.

Expert Answer:

Answer rating: 100% (QA)

Selling price per shoe 125 Manufacturing cost 53 40 Marketing cost 21 35 Roya

View the full answer