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Outback Outfitters sells a small camp stove for $110 per unit. Varlable expenses are $77 per unlt, and fixed expenses total $138,600 per month. Required:
Outback Outfitters sells a small camp stove for $110 per unit. Varlable expenses are $77 per unlt, and fixed expenses total $138,600 per month. Required: 1. What is the break-even point in unlt sales and In dollar sales? 2. If the varlable expenses per stove Increase as a percentage of the selling price, will it result in a higher or a lower break-even point? (Assume the fixed expenses remaln unchanged.) 3. At present, the company Is selling 17,000 stoves per month. The sales manager is convinced a 10% reduction In the selling price would result in a 25% increase in unlt sales. Prepare two contribution format Income statements, one under present operating conditions, and one as operations would appear after the proposed changes. 4. Refer to the data In Required 3. How many stoves would have to be sold at the new selling price to attaln a target profit of $80,000 per month
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