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The Hot Foot Company, a producer of specialty shoes, is in the process of planning next year's operations. The company has asked you to complete
The Hot Foot Company, a producer of specialty shoes, is in the process of planning next year's operations. The company has asked you to complete several calculations based upon the following information for 80,000 units: Total Per Unit Sales $6,720,000 $ 84.00 Variable costs: Cost of goods sold 4,224,000 52.80 Selling and admin. 1,152,000 14.40 Contribution margin 1,344,000 16.80 Fixed costs: Cost of goods sold 576,000 Selling and admin. 337,920 Operating income $ 430,080 1. How many units must be sold to breakeven? 2. How many units must be sold for CVP Card Company to double its current operating income? In order to increase production, the company will need to purchase additional equipment that will increase total fixed expenses by $192,000 and increase total variable expenses by 10%. 3. Calculate the new variable cost per unit. 4. How many units must be sold to breakeven if the equipment is purchased
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