CollegePak Company produced and sold 60,000 backpacks during the year just ended .at an average price of $ 20 per unit. Variable manufacturing costs were $ 8 per unit, and variable marketing costs were $ 4 per unit sold. Fixed costs amounted to $ 180,000 for manufacturing and $ 72,000 for marketing. There was no year-end work-in-process inventory. (Ignore income taxes.)
Required:
1. Compute College park’s break-even point in sales dollars for the year.
2. Compute the number of sales units Required to earn a net income of $ 180,000 during the year.
3. College Pak's variable manufacturing costs are expected to increase by 10 percent in the coming year.Compute the firm’s break-even point in sales dollars for the coming year.
4. If Collegel Pak's variable manufacturing costs do increase by 10 percent. compute the selling price that would yield the same contribution-margin ratio in the coming year.
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