After researching the market, Mr. Jamail concludes that the $350 per set selling price is too high. Customers will likely pay only $310 per set. Mr. Jamail believes he can obtain a cost reduction from his supplier of $20 per set (variable cost drops from $210 per set to $190 per set) and still provide the level of quality required to achieve a sales volume of 75 sets. Under these circumstances, what amount of fixed costs can Mr. Jamail incur and still obtain the target profit of $4,900?

Selling price per unit

Variable Expenses per unit

Sales volume in units

Profit

Sales

=

VC

+

FC

+

Profit

Selling Price

*

VC

*

per unit

# of units

)

=

(

per unit

# of units

)

+

FC

+

Profit

*

)

=

(

*

)

+

X

+

=

+

X

+

=

X