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Barry Carter is considering opening a music store. He wants to estimatethe number of CDs he must sell to break even. The CDs will be sold for $13.98 each, variable operating costs are $10.48 per CD, and annual fixed operating costs are $73,500.
Problem A.) Find the operating break even point in number of CDs
Problem B.) Calculate the total operating costs at the break even volume found in part a.
Problem C.) If Barry estimates that at a minimum he can sell 2,000 CDs per month, should he go into music business?
Problem D.) How much EBIT will Barry realize if he sells minimum 2,000 CDs per month noted in part c?
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