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Outback Outfitters sells recreational equipment. One of the company's products, a smal camp stove, sells for $1 expenses associated with the stove total $158,400 per
Outback Outfitters sells recreational equipment. One of the company's products, a smal camp stove, sells for $1 expenses associated with the stove total $158,400 per month. Required: 1. Compute the company's break-even point in unit sales and in dollar sales. Break-Even Point Number of stove 4,800 Total sales dollars $ 528,000 2. If the variable expenses per stove 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 Higher break-even point Lower break-even point 3. At present, the company is selling 11,000 stoves per month. The sales manager is convinced that a 10% reduction in the selling price would result in a 25% increase in monthly sales of stoves. Prepare two contribution format income statements, one proposed changes. Outback Outfitters Present Proposed 13,750 Stoves 11,000 Stoves Total Per unit Total Per unit 0 0 0 0 4. Refer to the data in (3) above. How many stoves would have to be sold at the new selling price to yield a minimum net operating income of $71,000 per month? (Round up your answer to the nearest whole number.) Number of stoves to be sold
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