The following monthly data are available for RedEx, which produces only one prod
ID: 2345605 • Letter: T
Question
The following monthly data are available for RedEx, which produces only one product that it sells for $84 each. Its unit variable costs are $28 and its total fixed expenses are $64,960. Sales during April totaled 1,600 units.(a) How much is the breakeven point in sales dollars for RedEx?
(b) How many units must RedEx sell in order to earn a profit of $24,640?
(c) A new employee suggests that RedEx sponsor a company softball team as a form of advertising. The cost to sponsor the team is $1,792. How many more units must be sold to cover this cost?
Explanation / Answer
64,960/(84-28)= 1,160 1160* 84= 97,440 (64,960+24,640)/(84-28) 1,600 1,792/(84-28)= 32
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