1) "Variable costs are always relevant, and fixed costs are always irrelevant. Do you agree? Why?

Gulf Inc. is a producer of a popular product. Its average selling price of a product is 5,000 BD, which it purchases from the manufacturer for 4,200 BD. Each month, Gulf Inc. pays 52,800 BD in rent and other office expenditures and 75,200 BD for salespeoples salaries. In addition to their salaries, salespeople are paid a commission of 4% of the sale price for each product they sell. Gulf Inc. also spends 18,400 BD each month for local advertisements. Its tax rate is 30%.

1. How many products must Gulf Inc. sell each month to break even? Show the answer and calculations by typing to the below answer field or you can upload a file. It's up to you.

2. Gulf Inc. has a target monthly net income of 63,000 BD. What is its target monthly operating income? How many products must be sold each month to reach the target monthly net income of 63,000 BD? Show the answer and calculations by typing to the below answer field or you can upload a file. It's up to you.