Ace Shoe Company sells heel replacement kits for men's shoes.It has fixed costs of $6 million and unit variable costs of $5 per pair.If the company charges $15 per pair,how many pairs must it sell to break even?

Question

Quizplus · Accepted Answer

To break even, the total revenue must equal the total cost. 
Let x be the number of pairs sold: 
Revenue = $15x 
Total Cost = Fixed Cost + Variable Cost = $6,000,000 + $5x

Set the revenue equal to the total cost:

$15x = $6,000,000 + $5x

Simplify and solve for x:

$10x = $6,000,000

x = 600,000

Therefore, the company must sell 600,000 pairs of heel replacement kits to break even. 
So, the best choice is C.

Ace Shoe Company Sells Heel Replacement Kits for Men's Shoes