Racer Industries Has Fixed Costs of $900,000

question 151

Essay

Racer Industries has fixed costs of $900,000. Selling price per unit is $250, and variable cost per unit is $130.
Required
(a) How many units must Racer sell in order to break even?
(b) How many units must Racer sell in order to earn a profit of $480,000?
(c) A new employee suggests that Racer Industries sponsor a 10K marathon as a form of advertising. The cost tosponsor the event is $7,200. How many more units must be sold to cover this cost?

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Definitions:

Long Term Disability

Insurance coverage that provides financial assistance to individuals unable to work due to a disability, usually extending for years or until retirement age.

Infertility

The inability to conceive a child after one year of regular, unprotected sexual intercourse.

Psychological Trauma

A condition resulting from extremely stressful or disturbing events that overwhelm an individual's ability to cope, causing feelings of helplessness.

Concurrent Sexual Partners

Having multiple sexual relationships at the same time, which can elevate the risk of transmitting sexually transmitted infections.