Question

if Blossom Assume that v.c . Increase to 45% and Fic increse by $12000 per month. were to raise sales by lol to cover there new costs. annual break even * New 1512000 unit variable cost = 50x45% = 22.5 New annual Fixed C= (114000 + 12000X12 New selling Price a 4 50x11=55 Wrong Answer breakeven pto : 1512000 / 1655 - 22,5)/555 2558769123 2 New Why? Blossom Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $50 throughout the country to loyal alumni of over 2,100 schools. Blossom's variable costs are 43% of sales, fixed costs are $114,000 per month. (c) * Your answer is incorrect. Assume that variable costs increase to 45% of the current sales price and fixed costs increase by $12,000 per month. If Blossom were to raise its sales price by 10% to cover these new costs, what would be the new annual breakeven point in sales dollars? (Round sales price to 2 decimal places, e.g. 52.75 and final answer to 0 decimal places, e.g. 5,275.) $ 2558769 Breakeven sales

Answer 1

55.00 Sale Price ($50 x 1.10) Variable cost ($ 50 x 45%) Contribution Margin ($) Contribution Margin (%) ($ 32.5/ $ 55) $ $ $ 22.50 32.50 59.09% New Fixed Cost $114,000+ $12,000 $ 1,26,000 = Break even Sales II II Fixed Cost / Contrubution % $ 1,26,000 / 59.09% $ 2,13,231 II or Break Sales (Fixed Cost / Contribution per unit) x Sale price $ 1,26,000 / 32.50 x $55 3,877 units x $ 55 $ 2,13,235

In case of any doubts or issues, please do comment below