Outback Outfitters sells recreational equipment. One of the company's products, a small camp stove, sells for $120 per unit. Variable expenses are $84 per stove, and fixed expenses associated with the stove total $151,200 per month.

Required:

1. What is the break-even point in unit sales and in dollar sales?

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 remain unchanged.)

3. At present, the company is selling 9,000 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 under present operating conditions, and one as operations would appear after the proposed changes.

Assignments: Managerial Acco X Question 1 - Homework 3 - Cor X Course Hero X G Ida Company produces a hand X + > C a ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252FIms.mheducation.com%252Fmghmiddlewa... Homework 3 i Saved Help Save & Exit Submit Required 1 Required 2 Required 3 Required 4 At present, the company is selling 9,000 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 under present operating conditions, and one as operations would appear after the proposed changes. 1.2 points Outback Outfitters Contribution Income Statement Stoves - Present Stoves - Proposed eBook 9,000 References Total Per unit Total Per unit 0 $ 0 0 $ 0 $ 0 $ 0 Mc Graw Pre.v. 1 of 4 Next > Hill