Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Mini case study Alpine Ski Company recently expanded its manufacturing capacity. During 2021, the firm produced and sold 5.000 units of skiing equipment including boots,

image text in transcribed
Mini case study Alpine Ski Company recently expanded its manufacturing capacity. During 2021, the firm produced and sold 5.000 units of skiing equipment including boots, goggles, and helmets. Helmets represents half of their sales and the other half of sales is equally divided into goggles and boots The company's annual fixed costs totaled 80.000 Alpine Ski Company is subject to a 30% income tax rate. Product type Sale price per unit Helmet 605 Goggles 305 Boots SOS Variable Manufacturing costs per unit 405 155 555 Required: 1. Compute the unit contribution margin for each product type. (10 points) 2. What is the company's sales mix? (10 points) 3. Compute the weighted average unit contribution margin and calculate the breakeven point in units for each product type (20 points) 4. Prepare a contribution income statement of the company for 2021 knowing that: Variable selling costs equaled 5000$ and variable administrative costs equaled 3500s. The total annual fixed costs were divided into 50.000s of fixed manufacturing costs, 10.000s of fixed selling costs and 20.000 of fixed administrative costs. Don't forget about the income taxes. (30 points). 5. How many products of each type should Alpine ski sell to cam a targeted net profit of 100.000$. (20 points) 6. Suppose the sales revenues increased by 5%, what would be the impact on net income? (10 points). Show all your calculation steps and details

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Compliance Audits And Plans For Healthcare

Authors: Cherilyn G. Murer, Michael A. Murer, Lyndean Lenhoff Brick, Healthcare Financial Management Association (U. S.)

1st Edition

0070444625, 978-0070444621

More Books

Students also viewed these Accounting questions