Sugment reporting- ACCT-2302 G003 8W2 Principles of Outback Outfitters sells recreational equipment. One of the company's products, a small camp stove, sells for $110 per unit. Variable expenses are $77 per stove, and fixed expenses associated with the stove total $138,600 per month. Required: 1. Compute the company's break-even point in unit sales and in dollar sales. Break-Even Point Number of stoves 4,200 Total sales dollars 462,000 $ 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-even point? (Assume that the fixed expenses remain unchanged.) Higher break-even point Lower break-even point 3. At present, the company is selling 18,000 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. Outback Outfitters Present Proposed 22,500 Stoves 18,000 Stoves Total Per unit Total Per unit Sales $ 110 Variable expenses 77 Contribution margin $ 0 33 $ 0 Fixed expenses 138,600 3. At present, the company is selling 18,000 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. Outback Outfitters Present Proposed 22,500 Stoves 18,000 Stoves Total Per unit Total Per unit Sales $ 110 Variable expenses 77 Contribution margin 0 Fixed expenses 138,600 $ (138,600) Net operating income $ 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 $74,000 per month? (Round up your answer to the nearest whole number.) Number of stoves to be sold 33