Problem 5-3 Determine break-even point under varying assumptions (L.O. 3, 4)

The management of Bootleg Company wants to know the break-even point for its new line of hiking boots under each of the following independent assumptions. The selling price is $50 per paid of boots unless otherwise stated. (Each pair of boots in one unit.)

Fixed costs are $300,000; variable cost is $30 per unit Fixed costs are $300,000; variable cost is $20 per unit Fixed costs are $250,000; variable cost is $20 per unit Fixed costs are $250,000; selling price is $40; and variable cost is $30 per unit

Compute the break-even point in units and sales dollars for each of the four independent cases.

Problem 5-4 Determine the margin of safety (L.O. 5)

Refer to Problem 5-3. Bootleg Companys sales are $1,100,000. Determine the margin of safety in dollars for cases (a) through (d).

Problem 5-5 Compute the level of sales dollars needed to achieve a specified level of income (L.O. 6)

Using the data in Problem 5-3 (a through d), determine the level of sales dollars required to achieve a net income of $125,000.