Hazardous Toys Company produces boomerangs that sell for $8 each and have a variable cost of $7.50. Fixed costs are $15 a. Compute the break-even point in units b. Find the sales(in units)needed to earn a profit of $25,000 Solution: The Hazardous Toys Company $l5,000 . BE s800c7=30000nits Profit+FC$25,000+$15000 b. Q P-VC $800-$750 $40,000 80.000 units $50 Copyright o2005 by The McGranr-Hill Companies, Inc. S-162Copyright © 2005 by The McGraw-Hill Companies, Inc. S-162 5-2. Hazardous Toys Company produces boomerangs that sell for $8 each and have a variable cost of $7.50. Fixed costs are $15,000. a. Compute the break-even point in units. b. Find the sales (in units) needed to earn a profit of $25,000. Solution: The Hazardous Toys Company a. 30,000 units $8.00 $7.50 $15,000 BE = − = ( ) 80,000 units $.50 $40,000 $8.00 $7.50 $25,000 $15,000 P VC Profit FC b. Q = = − + = − + =