Question
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: 1. 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.) 2. 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 the nearest whole dollar.) 3. 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.) 4. 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.)
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