Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

SKYZ Company produces two models of basketball hoops, Ausom Garage Mount and Delux Ground Mount. Presented is sales information for the year 2017: Ausom Delux

SKYZ Company produces two models of basketball hoops, Ausom Garage Mount and Delux Ground Mount. Presented is sales information for the year 2017:

Ausom Delux Total
units manufactured and sold 1,000 1,500 2,500
sales revenue $300,000 $700,000 $1,000,000
variable costs (200,000) (420,000) (620,000)
Contribution Margin $100,000 $280,000 380,000
Fixed Costs (252,510)
Before-tax profit 127,490
Income taxes (40%) (50,996)
After-tax profit $76,494

a) Determine the current break-even point in sales dollars.

b) With the current product mix and break-even point, determine the average unit contribution margin and unit sales.

c) Sales representatives believe that the total sales will increase to 3,000 units, with the sales mix likely shifting to 80 percent Ausom Garage Mount and 20 percent Delux Fround Mount over the next few years. Evaluate the desirability of this projection.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Wiley CPAexcel Exam Review Focus Notes Auditing And Attestation 2022

Authors: Wiley

1st Edition

111984858X, 978-1119848585

More Books

Students also viewed these Accounting questions

Question

Evaluating Group Performance?

Answered: 1 week ago