Question 1

Outback Outfitters sells recreational equipment. One of the company's products, a small camp stove, selis for $ tho per unit. Variabie expenses are $98 per stove, and fixed expenses as5oclated with the stove total $205,800 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-cven point? (Assume that the flxed expenses remain unchanged.) 3. At present, the company is selling 14,000 stoves per month. The sales manager is convinced that a 10% reduction in the seling 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 changos. 4. Refer to the data in Required 3. How many stoves would have to be sold at the new seiling price to attain a totgot profit of $75,000 per month? Complete this question by entering your answers in the tabs below. Feaured 2 At present, the companyis seling 14,000 stoves per month. The sales manager is convinced that a 10% reduction in the selilng 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. Complete this question by entering your answers in the tabs below. Refer to the data in Required 3. How many stoves would have to be sold at the new selling price to attain a target profit of $75,000 per month? (Round up your final answer to the nearest unit.)