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3. The Sock Company buys hiking socks for $6 a pair and sells then for $10. Management budgets monthly fixed costs to be $12,000 per month.

Consider each of the following questions independently of each other: a) What is the monthly breakeven point in units and dollars?

b) What is the monthly sales level in units required to earn a target income of $6,000?

c) What is the break event point in units if management reduces the selling price to $8 a pair?

d) The Sock Company finds a new supplier for the sock who will charge one dollar less than they are paying their current supplier. What is the breakeven point in dollars?

e) The Sock Company plans to advertise in hiking magazines. The ad campaign will increase total fixed costs by $2,000 per month. What is the breakeven point in units?