Break-even point | |||||
1 | Number of stoves | 4,900 | |||
Total sales dollars | $ 5,39,000 | ||||
2 | Lower - break even point | ||||
3 | Present | Proposed | |||
9000 | Stoves | 11250 | Stoves | ||
Sales | $ 9,90,000 | $ 110 | $ 11,13,750 | $ 99 | |
Variable cost | $ 6,93,000 | $ 77 | $ 8,66,250 | $ 77 | |
Contribution margin | $ 2,97,000 | $ 2,47,500 | |||
Fixed cost | $ 1,61,700 | $ 1,61,700 | |||
Net Income | $ 1,35,300 | $ 85,800 | |||
4 | Number of stoves to be sold | 10,714 | |||
1 | Workings: | ||||
(i) | Unit selling Price | = | $ 110 | ||
Less: | Unit variable cost | = | $ 77 | ||
(ii) | Unit contribution margin | = | $ 33 | ||
(ii) / (i) | Contribution margin ratio | = | 30% | ||
Break-even point in units | = | Fixed costs / Unit contribution margin | |||
= | $161700 / $33 | ||||
= | 4,900 | units | |||
Break-even point in dollars | = | Fixed costs /Contribution margin ratio | |||
= | $161700 / 30% | ||||
= | $ 5,39,000 | ||||
3 | New Units of Stoves = | 9000 X 1.25 | = | $ 11,250 | |
New Selling Price = | $110 X 0.90 | = | $ 99 | ||
4 | Target Profit = | $ 74,000 | |||
Contribution per unit = | $247500/11250 units | ||||
$ 22 | |||||
Number of stoves to be sold | (Fixed cost + Target profit) / Contribution per unit | ||||
($161700 + $74000) / $22 | |||||
10,714 | units |
Exercise 3-17 Break-Even and Target Profit Analysis [LO3-4, LO3-5, LO3-6] Outback Outfitters sells recreational equipment. One...
Exercise 6-17 Break-Even and Target Profit Analysis [LO6-4,
LO6-5, LO6-6]
Outback Outfitters sells recreational equipment. One of the
company’s products, a small camp stove, sells for $140 per unit.
Variable expenses are $98 per stove, and fixed expenses associated
with the stove total $197,400 per month.
Required:
1. What is the break-even point in unit sales and in dollar
sales?
2. If the variable expenses per stove increase as a percentage
of the selling price, will it result in a...
Exercise 5-17 Break-Even and Target Profit Analysis (LO5-4, LO5-5, LO5-6) Outback Outfitters sells recreational equipment. One of the company's products, a small camp stove, sells for $140 per unit. Variable expenses are $98 per stove, and fixed expenses associated with the stove total $205.800 per month 03:59:22 Book Required: 1. What is the break-even point in unit sales and in dollar sales? 2. If the variable expenses per stove increase as a percentage of the selling price, will it result...
Exercise 5-17 Break-Even and Target Profit Analysis (L05-4, LO5-5, L05-6] Outback Outfitters sells recreational equipment. One of the company's products, a small camp stove, sells for $90 per unit. Variable expenses are $63 per stove, and fixed expenses associated with the stove total $132,300 per month. Required: 1. What is the break-even point in unit sales and in dollar sales? 2. If the variable expenses per stove increase as a percentage of the selling price, will it result in a...
Check my Exercise 5-17 Break-Even and Target Profit Analysis [LO5-4, LO5-5, LO5-6] Outback Outfitters sells recreational equipment. One of the company's products, a small camp stove, sells for $140 per unit. Variable expenses are $98 per stove, and fixed expenses associated with the stove total $184,800 per month. Required: 1. What is the break-even point in unit sales and in dollar sales? 2. If the variable expenses per stove increase as a percentage of the selling price, will it result...
Exercise 5-17 Break-Even and Target Profit Analysis (LO5-4, LO5-5, LO5-6] Outback Outfitters sells recreational equipment. One of the company's products, a small camp stove, sells for $100 per unit. Variable expenses are $70 per stove, and fixed expenses associated with the stove total $129,000 per month. Required: 1. What is the break-even point in unit sales and in dollar sales? 2. If the variable expenses per stove increase as a percentage of the selling price, will it result in a...
Outback Outfitters sells recreational equipment. One of the company's products, a small camp stove, sells for $130 per unit. Variable expenses are $91 per stove, and fixed expenses associated with the stove total $179,400 per month Required: 1. Compute the company's break-even point in unit sales and in dollar sales. Break-Even Point Number of stoves Total sales dollars 2. If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or...
Outback Outfitters sells recreational equipment. One of the company's products, a small camp stove, sells for $130 per unit. Variable expenses are $91 per stove, and fixed expenses associated with the stove total $191,100 per month. Required: 1. Compute the company's break-even point in unit sales and in dollar sales. Break-Even Point Number of stoves Total sales dollars 2. If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or...
Outback Outfitters sells recreational equipment. One of the company's products, a small camp stove, sells for $90 per unit. Variable expenses are $63 per stove, and fixed expenses associated with the stove total $116,100 per month. Required: 1. Compute the company's break-even point in unit sales and in dollar sales. Break-Even Point Number of stoves Total sales dollars 2. If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or...
Outback Outfitters sells recreational equipment. One of the company’s products, a small camp stove, sells for $140 per unit. Variable expenses are $98 per stove, and fixed expenses associated with the stove total $205,800 per month. Required: 1. What is the break-even point in unit sales and in dollar sales? Break-even point in unit sales Break-even point in dollar sales 2. If the variable expenses per stove increase as a percentage of the selling price, will it result in...
Outback Outfitters sells recreational equipment. One of the company's products, a small camp stove, sells for $110 per unit. Variable expenses are $77 per stove, and fixed expenses associated with the stove total $161,700 per month. Required: 1. What is the break-even point in unit sales and in dollar sales? 2. If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or a lower break-even point? (Assume that the fixed...