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CollegePak Company produced and sold 90,000 backpacks during the year just ended at an average price of $50 per unit. Variable manufacturing costs were $22.00
CollegePak Company produced and sold 90,000 backpacks during the year just ended at an average price of $50 per unit. Variable manufacturing costs were $22.00 per unit, and variable marketing costs were $8.00 per unit sold. Fixed costs amounted to $560,000 for manufacturing and $232,000 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 $640,000 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.)
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