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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?


Definitions:

Cognitive

Relating to the mental processes of perception, memory, judgment, and reasoning, as opposed to emotional or physical processes.

Uncertain Environment

A scenario where the future conditions or outcomes are unpredictable, impacting decision-making and strategy in organizations.

Marketing Strategies

Plans developed by businesses to promote and sell products or services, including market research, advertising, and distribution methods.

Experimental Drug

A medication or therapy that is not yet approved for general use and is under investigation in clinical trials.

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