YZ Corp. sells recreational equipment. One of the company's products, a small camp stove, sells for $140 per nit. Variable expenses are $98 per stove, and fixed expenses associated with the stove total $184,800 per month. "equired: What is the break-even point in unit sales and in dollar sales? . If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or a ower break-even point? (Assume that the fixed expenses remain unchanged.) . At present, the company is selling 17,000 stoves per month. The sales manager is convinced that a 10% eduction in the selling price would result in a 25% increase in monthly sales of stoves. Prepare two contribution ormat income statements, one under present operating conditions, and one as operations would appear after the roposed changes. . Refer to the data in Required 3. How many stoves would have to be sold at the new selling price to attain a arget profit of $75,000 per month?
YZ Corp. sells recreational equipment. One of the company's products, a small camp stove, sells for $140 per nit. Variable expenses are $98 per stove, and fixed expenses associated with the stove total $184,800 per month. "equired: What is the break-even point in unit sales and in dollar sales? . If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or a ower break-even point? (Assume that the fixed expenses remain unchanged.) . At present, the company is selling 17,000 stoves per month. The sales manager is convinced that a 10% eduction in the selling price would result in a 25% increase in monthly sales of stoves. Prepare two contribution ormat income statements, one under present operating conditions, and one as operations would appear after the roposed changes. . Refer to the data in Required 3. How many stoves would have to be sold at the new selling price to attain a arget profit of $75,000 per month?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Step 1: Introduce to break even point
VIEWStep 2: Working for contribution margin per unit
VIEWStep 3: Working for break even point in units and sales dollar
VIEWStep 4: Working for sales, variable cost of current and proposal situation
VIEWStep 5: Working for required sales for target profit of $75,000
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