Maxie Pty Ltd Makes and Sells Two Types of Shoes,Plain

question 3

Multiple Choice

Maxie Pty Ltd makes and sells two types of shoes,Plain and Fancy.Product data is as follows:
Sixty per cent of the sales in units are Plain and annual fixed expenses are $45 000 and the sales mix remains constant.How many units of Fancy must Maxie Pty Ltd sell to earn a target profit of $31 500?

• A) 3400
• B) 2000
• C) 7286
• D) 8500

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Definitions:

U.S. Tariffs

Taxes or duties levied by the United States government on imported goods to protect domestic industries or to generate revenue.

Steel

A hard, strong alloy of iron with carbon and often other elements, used widely as a structural and fabricating material.

Dumping

The practice of selling a product in a foreign market at a price lower than the production cost or domestic market price, often to gain market share or dispose of surplus.

Heckscher-Ohlin Theorem

An economic theory stating that countries will export goods that use their abundant factors of production and import goods that use their scarce factors of production.