Question
Goalie's Ball, Inc. manufactures soccer balls. The company has a soccer ball that sells for $30 per ball. At present, the ball is manufactured in
Goalie's Ball, Inc. manufactures soccer balls. The company has a soccer ball that sells for $30 per ball. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $24 per ball, of which 80% is direct labor cost.
In 2021, the company sold 20,000 of these soccer balls, with the following results:
Sales (20,000 balls) | $600,000 |
Variable expenses | $480,000 |
Contribution margin | $120,000 |
Fixed expenses | $85,000 |
Net operating income | $35,000 |
Use the information provided above for Goalie's Ball. Compute 2021's break-even point in soccer balls for Goalie's Ball (Round your final answer up the nearest unit. i.e. 8,122.41 = 8,123) and include only numerals in your answer (i.e., do not include the word "soccer balls" or "units").
Use the information provided above for Goalie's Ball. The company is discussing the construction of a new, automated manufacturing plant. The new plant would reduce variable expenses by 25% per ball, but it would cause total fixed expenses per year to increase by $71,000. If the new plant is built and these changes occur, calculate Goalie's Ball new break-even point in soccer balls (assume the sales price would still be $30 per soccer ball). (Round your final answer up the nearest unit (i.e. 8,122.41 = 8,123) and Include only numerals in your answer (i.e., do not include the word "soccer balls" or "units").
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