Question
equired information [The following information applies to the questions displayed below.] Alpine Thrills Ski Company recently expanded its manufacturing capacity. The firm will now be
equired information
[The following information applies to the questions displayed below.]
Alpine Thrills Ski Company recently expanded its manufacturing capacity. The firm will now be able to produce up to 29,000 pairs of cross-country skis of either the mountaineering model or the touring model. The sales department assures management that it can sell between 23,000 and 27,000 units of either product this year. Because the models are very similar, the company will produce only one of the two models.
The following information was compiled by the accounting department.
Model | ||||||
Mountaineering | Touring | |||||
Selling price per unit | $ | 146.00 | $ | 134.00 | ||
Variable costs per unit | 86.30 | 86.30 | ||||
Fixed costs will total $610,400 if the mountaineering model is produced but will be only $517,200 if the touring model is produced. Alpine Thrills Ski Company is subject to a 35 percent income tax rate.
How much would the variable cost per unit of the touring model have to change before it had the same break-even point in units as the mountaineering model? (Round your intermediate calculations and final answer to 2 decimal places.)
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