Question
The following information applies to questions 34 and 35 Aquaspore Limited sells advanced technology wetsuits for a price of $2600 each. The company has a
The following information applies to questions 34 and 35
Aquaspore Limited sells advanced technology wetsuits for a price of $2600 each. The company has a profit target this year of $124,000 and is considering increasing sales commissions in an effort to increase sales. The contribution margin ratio of the wetsuits is 25% and the company's fixed costs for this year are expected to be $320,000.
Question 34 (2 marks):
How many wetsuits must the company sell to reach its profit target?
Answer:
The following information applies to questions 34 and 35
Aquaspore Limited sells advanced technology wetsuits for a price of $2600 each. The company has a profit target this year of $124,000 and is considering increasing sales commissions in an effort to increase sales. The contribution margin ratio of the wetsuits is 25% and the company's fixed costs for this year are expected to be $320,000.
Question 35 (2 marks):
If the company increases sales commissions by $100 per wetsuit, how many wetsuits must the company sell to reach its profit target?
Answer:
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Financial Accounting Tools for Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
5th Canadian edition
978-1118024492
