Question
Alpine Thrills Ski Company recently expanded its manufacturing capacity. The firm will now be able to produce up to 35,000 pairs of cross-country skis of
Alpine Thrills Ski Company recently expanded its manufacturing capacity. The firm will now be able to produce up to 35,000 pairs of cross-country skis of either the mountaineering model or the touring model. The sales department assures management that it can sell between 29,000 and 33,000 units of either product this year. Because the models are very similar, the company will produce only one of the two models.
The following information was compiled by the accounting department.
| Model | |||||
| Mountaineering | Touring | ||||
Selling price per unit | $ | 152.00 |
| $ | 140.00 |
|
Variable costs per unit |
| 89.20 |
|
| 89.20 |
|
Fixed costs will total $634,400 if the mountaineering model is produced but will be only $535,200 if the touring model is produced. Alpine Thrills Ski Company is subject to a 35 percent income tax rate.
- If Alpine Thrills Ski Company desires an after-tax net income of $43,120, how many pairs of touring skis will the company have to sell?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started