Answered step by step
Verified Expert Solution
Question
1 Approved Answer
CollegePak Company produced and sold 83,000 backpacks during the year just ended at an average price of $43 per unit. Variable manufacturing costs were $18.50
CollegePak Company produced and sold 83,000 backpacks during the year just ended at an average price of $43 per unit. Variable manufacturing costs were $18.50 per unit, and variable marketing costs were $4.72 per unit sold. Fixed costs amounted to $553,000 for manufacturing and $226,400 for marketing. There was no year-end work-in-process inventory. (Ignore income taxes.)
Required:
- Compute CollegePaks break-even point in sales dollars for the year. (Do not round intermediate calculations. Round your final answer up to the nearest whole dollar.)
- Compute the number of sales units required to earn a net income of $605,000 during the year. (Do not round intermediate calculations. Round your final answer up to nearest whole number.)
- CollegePak's variable manufacturing costs are expected to increase by 10 percent in the coming year. Compute the firms break-even point in sales dollars for the coming year. (Do not round intermediate calculations. Round your final answer up to the nearest whole dollar.)
- If CollegePaks variable manufacturing costs do increase by 10 percent, compute the selling price that would yield the same contribution-margin ratio in the coming year. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
1. Break-even point 2. Number of sales 3. Break-even point 4. Selling price units
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