Problem 1:

The Suffolk Sock Company buys socks for $6 per pair and sells them for $10. The fixed costs are $10,000.

Required:

a) Compute the companys breakeven point in units

b) Compute the companys breakeven point in sales dollars

c) Compute the monthly sales in units required to earn a target operating income of $6,000.

Problem 2:

The XYZ company collected recipes from members and published a cookbook. The book sells for $18 per copy. The company estimates that the club must sell 2000 books to breakeven on its $4,000 investment, What is the variable cost per unit assumed in this analysis?