See correct answer. See correct answer. The breakeven volume is 65,000 units [($585,000 FC / $9 CM ($25 ? $16)]. Given a sales volume of 80,000 units, the company would produce a before-tax profit of $135,000 [(80,000 units ? 65,000) × $9 CM], which would be the most that company XYZ could pay for advertising and still breakeven. See correct answer.
|