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Outback Outfitters sells recreational equipment. One of the companys products, a small camp stove, sells for $120 per unit. Variable expenses are $84 per stove,

Outback Outfitters sells recreational equipment. One of the companys products, a small camp stove, sells for $120 per unit. Variable expenses are $84 per stove, and fixed expenses associated with the stove total $154,800 per month.

3. At present, the company is selling 15,000 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.

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 $73,000 per month? (Round your answer to the nearest whole number.)

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