Question
Exercise 5-12 Break-Even and Target Profit Analysis [LO4, LO5, LO6] Reveen Products sells camping equipment. One of the companys products, a camp lantern, sells for
Exercise 5-12 Break-Even and Target Profit Analysis [LO4, LO5, LO6]
Reveen Products sells camping equipment. One of the companys products, a camp lantern, sells for $120 per unit. Variable expenses are $84 per lantern, and fixed expenses associated with the lantern total $151,200 per month. |
Required: | |
1. | Compute the companys break-even point in number of lanterns and in total sales dollars. |
Number of lanterns | |
Total sales dollars | $ |
2. | If the variable expenses per lantern increase as a percentage of the selling price, will it result in a higher or a lower break-even point? (Assume that the fixed expenses remain unchanged.) Which one is it? | |||||||||||||||||||||||||||||||||||||||||||||||||||
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