Racer Industries has fixed costs of $1,000,000. Selling price per unit is $250, and variable cost per unit is $130.
Required:
(a) How many units must Racer sell in order to break even?
(b) How sales dollars must Racer have in order to break even?
(c) A new employee suggests that Racer Industries sponsor a 10K marathon as a form of advertising. The cost to sponsor the event is $7,200. How many more units must be sold to cover this cost?