Question

Mason Company manufactures and sells shoelaces for $2.70 per pair. Its variable cost per unit is $2.40. Mason's total fixed costs are $10,500. How many pairs must Mason Company sell to break even

Answer 1

Thus, the break even is 35,000 pairs.

Step-by-step explanation:

Given that,

Company manufactures and sells shoelaces = $2.70 per pair

Variable cost per unit = $2.40

Total fixed costs = $10,500

Break-even (in pairs):

= Fixed costs ÷ Contribution per pair

= Fixed costs ÷ (selling price per unit - variable cost per unit)

= $10,500 ÷ ($2.70 - $2.40)

= $10,500 ÷ $0.30

= $35,000

Thus, the break even is 35,000 pairs.