1. Your company is SUZY'S SOCK EMPORIUM. In the first month after opening, your company sold 10,000 pairs of socks at $10 each. What was your company's revenue (sales)? (1 mark)

2. The following are your company's production costs:

Costs to produce each pair of socks are $5 (This includes material costs and salaries)

$5000 per month rent for your office space and warehouse

$8000 Management Salaries per month

$3000 per month for equipment rental

How much are your total costs to produce 10,000 pairs of socks in one month? (1 mark)

3. Based on the previous information, how much is your company's profit for one month? (1 mark)

4. Based on the following information, calculate the total pairs of socks your company must sell in one year to break-even. Recall that 'break-even' means that your total revenue equals your total costs.

Total Fixed Costs = $16,000

Selling Price = $10

Average Variable Cost (Material Costs per pair of socks) = $5

So if your company sold __________________ pairs of socks, it would make $______________ profit. (1 mark)

5. What is you increased the selling price of the socks from $10 to $14? Now how many socks would you need to sell to break even? (1 mark)

6. If you charge a higher price for the socks, you will need to sell _________________ (more or fewer) [circle the correct answer] socks to break-even. (1 mark)

7. Assume the selling price is $10. What quantity of socks would you need to sell to make $10,000 profits per month? (1 mark)

8. What if market research indicated that for the type of socks you are selling, that there was demand for 5,000 pairs each month. What would be your recommendations? (1 mark)