In solving the exercises below, round all the dollar figures to TWO DECIMAL POINTS.

12-4

The Louboutin Footwear Company manufactures a luxurious line of womens formal and casual shoes.

The average selling price of its finished product is $95 per pair.

The variable cost for this same pair of shoes is $63.

The company incurs fixed costs of $150,000 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 firms profit or loss at the following units of production sold?

2,500 pairs of shoes

5,000 pairs of shoes

75000 pairs of shoes