Question
Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that
Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next years plans call for a $340 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $421,600, up to a maximum capacity of 550,000 yards of rope. Forecasted variable costs are $204 per 100 yards of XT rope.
Estimate Product XT's break-even point in terms of sales units and sales dollars. 1 unit 100 yards.) (Do not round intermediate calculations.) Contribution margin per 100 yds Sales Less Variable cost Contribution margin 0 Contribution margin ratio Contribution margin ratio Contribution margin ratio Choose Numerator: Choose Denominator: CM per unit Sales per unit = 1(a) Estimate Product XT's break-even point in terms of sales units. (1 unit = 100 yards) Choose Numerator: Choose Denominator: - Break-even units Fixed costs Contribution margin per unit Break-even units 1(b) Estimate Product XT's break-even point in terms of sales dollars Choose Numerator: Choose Denominator: - Break-even dollars Fixed costs Contribution margin ratio Break-even dollarsStep by Step Solution
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