Racer Industries Has Fixed Costs of $900,000

question 243

Essay

Racer Industries has fixed costs of $900,000. The selling price per unit is $250, and the variable cost per unit is $130.
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 to
sponsor the event is $7,200. How many more units must be sold to cover this cost?

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