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Ardella, a leading firm in the sports industry, produces basketballs for the consumer market. For the year ended December 31, 2020, Ardella sold 177,700 basketballs
Ardella, a leading firm in the sports industry, produces basketballs for the consumer market. For the year ended December 31, 2020, Ardella sold 177,700 basketballs at an average selling price of $37 per unit. The following information also relates to 2020 (assume constant unit costs and no variances of any kind): (Click the icon to view the 2020 data.) Read the requirements i Data Table Inventory, January 1, 2020: 32,800 basketballs Inventory, December 31, 2020: 25,100 basketballs Fixed manufacturing costs: $1,020,000 Fixed administrative costs: $4,726,400 Direct materials costs: $9 per basketball Direct labor costs: $6 per basketball Print Done Requirement 1. Calculate the breakeven point (in basketballs sold) in 2020 under: (a) Variabl a. Calculate the breakeven point in units under variable costing. Breakeven point = under variable costing 0 Requirements X 1. Calculate the breakeven point (in basketballs sold) in 2020 under: a. Variable costing b. Absorption costing 2. Suppose direct materials costs were $11 per basketball instead. Assuming all other data are the same, calculate the minimum number of basketballs Ardella must have sold in 2020 to attain a target operating income of $110,000 under: a. Variable costing b. Absorption costing Print Done
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