Pierson Pet Products produces two models of dog beds: Basic and Custom. Price, cost and expected sales volume data for the two models are as follows: Basic $ 19.00 $ 12.00 36,000 Custom $ 54.00 $ 33.00 24,000 Selling price per bed Variable cost per bed Expected sales (beds) The total fixed costs for the company are $396,900. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the expected product mix applies regardless of total sales, compute the break-even volume. Note: Do not round Intermediate calculations. c. If the product sales mix were to change to three Basic beds for each Custom bed, what would be the new break-even volume? Note: Do not round intermediate calculations.
Pierson Pet Products produces two models of dog beds: Basic and Custom. Price, cost and expected sales volume data for the two models are as follows: Basic $ 19.00 $ 12.00 36,000 Custom $ 54.00 $ 33.00 24,000 Selling price per bed Variable cost per bed Expected sales (beds) The total fixed costs for the company are $396,900. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the expected product mix applies regardless of total sales, compute the break-even volume. Note: Do not round Intermediate calculations. c. If the product sales mix were to change to three Basic beds for each Custom bed, what would be the new break-even volume? Note: Do not round intermediate calculations.
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
ChapterMB: Model-building Problems
Section: Chapter Questions
Problem 20M
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Transcribed Image Text:Pierson Pet Products produces two models of dog beds: Basic and Custom. Price, cost and expected sales volume data for the two
models are as follows:
Basic
$ 19.00
$ 12.00
36,000
Custom
$ 54.00
$ 33.00
24,000
Selling price per bed
Variable cost per bed
Expected sales (beds)
The total fixed costs for the company are $396,900.
Required:
a. What is the anticipated level of profits for the expected sales volumes?
b. Assuming that the expected product mix applies regardless of total sales, compute the break-even volume.
Note: Do not round Intermediate calculations.
c. If the product sales mix were to change to three Basic beds for each Custom bed, what would be the new break-even volume?
Note: Do not round intermediate calculations.
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