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Mozell, a leading rm in the sports industry, produces basketballs for the consumer market. For the year ended December 31. 2017, Mozell sold 182,000 basketballs
Mozell, a leading rm in the sports industry, produces basketballs for the consumer market. For the year ended December 31. 2017, Mozell sold 182,000 basketballs at an average selling price of $37 per unit. The following information also relates to 2017 (assume constant unit costs and no variances of any kind): @ (Click the icon to View the 2017 data.) Read the muirements. Requirement 1. Calculate the breakeven point (in basketballs sold) in 2017 under: (a) Variable costing and (b) Absorption costing. a. Calculate the breakeven point in units under variable costing. Breakeven point :1: :I: under variable costing :l Data table Inventory, January 1, 2017: 34,600 basketballs Inventory, December 31, 2017: 22,600 basketballs Fixed manufacturing costs: $1,020,000 Fixed administrative costs: $4,726,400 Direct materials costs: $9 per basketball Direct labor costs: $6 per basketball Requirements 1. Calculate the breakeven point (in basketballs sold) in 2017 under: a. Variable costing b. Absorption costing 2. Suppose direct materials costs were $11 per basketball instead. Assuming all other data are the same, calculate the minimum number of basketballs Mozell must have sold in 2017 to attain a target operating income of $90,000 under: a. Variable costing b. Absorption costing
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