Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Breakeven analysis; CVP analysis (LO 1. 3) Matoaka Monogram, sells stadium blankets that have been monographed with high school and university emblems The blankets retail
Breakeven analysis; CVP analysis (LO 1. 3) Matoaka Monogram, sells stadium blankets that have been monographed with high school and university emblems The blankets retail for $40 throughout the country to loyal alumni of over 1 000 schools. Atoka's variable costs are 40% of sales; fixed costs are $120, 000 per month. What is Atoka's annual breakeven point in sales dollars?) Matoaka currently sells 100, 000 blankets per year. It sales volume were to increase by 15%, by how much would operating income increase? c. Assume that variable costs increase to 45% of the current sales price and fixed costs increase by $10, 000 per month. If Matoaka were to raise its sales price by .10%,Jo cover these new costs, what would be the new annual breakeven point in sales dollars? d. Assume that variable costs increase to 45% of the current sales price and fixed increase by $10, 000 per month. If Matoaka were to raise its sales price 10% to cover these new costs, but the number of blankets sold were to drop by 5%, What would be the new annual operating income?^' e. If variable costs and fixed costs were to change as in part (d), would Matoaka be better off raising its selling price and losing volume or keeping the selling price at $40 and selling 100, 000 blankets? Why
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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