(Break-even point and operating leverage)

Footwear Inc. manufactures a complete line of men's and women's dress shoes for independent merchants. The average selling price of its finished product is $75

per pair. The variable cost for this same pair of shoes is $60. Footwear Inc. incurs fixed costs of $170,000 per year.

a. What is the break-even point in pairs of shoes sold for the company?

b. What is the dollar sales volume the firm must achieve to reach the break-even point?

c. What would be the firm's profit or loss at the following units of production sold: 4,000 pairs of shoes? 12,000 pairs of shoes? 16,000 pairs of shoes?