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10. The owners have set a target profit of $25,000 per month ($300,000 per year) in order for them to decide to devote themselves full time to JW Sports Supplies. Realizing from their projected income statements that their current predictions fall short of the $25,000, they want to evaluate the impact of alternative actions. Specifically, they want to evaluate each of the following factors, separately (in doing so, assume all other factors stay the same as projected in the income statement): What price must the company set to achieve a profit of $25,000 per month? What must the VC per unit be to achieve a profit of $25,000 per month? How many units must it sell to achieve a profit of $25,000 per month? What must total monthly FCs be to achieve a profit of $25,000 per month? 11. The company is considering making a deluxe model. Its price would be $156, and its VC per unit would be $100, compared to a price of $100 and a VC of $60 for the basic model. It anticipates a sales mix of 60% basic model and 40% deluxe model. How many units of the basic model and how many units of the deluxe model must the company sell to break even?

10. The owners have set a target profit of $25,000 per month ($300,000 per year) in order for them to decide to devote themselves full time to JW Sports Supplies. Realizing from their projected income statements that their current predictions fall short of the $25,000, they want to evaluate the impact of alternative actions. Specifically, they want to evaluate each of the following factors, separately (in doing so, assume all other factors stay the same as projected in the income statement): What price must the company set to achieve a profit of $25,000 per month? What must the VC per unit be to achieve a profit of $25,000 per month? How many units must it sell to achieve a profit of $25,000 per month? What must total monthly FCs be to achieve a profit of $25,000 per month? 11. The company is considering making a deluxe model. Its price would be $156, and its VC per unit would be $100, compared to a price of $100 and a VC of $60 for the basic model. It anticipates a sales mix of 60% basic model and 40% deluxe model. How many units of the basic model and how many units of the deluxe model must the company sell to break even?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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10. The owners have set a target profit of $25,000 per month ($300,000 per year) in order for them to decide to devote themselves full time to JW Sports Supplies. Realizing from their projected income statements that their current predictions fall short of the $25,000, they want to evaluate the impact of alternative actions. Specifically, they want to evaluate each of the following factors, separately (in doing so, assume all other factors stay the same as projected in the income statement): What price must the company set to achieve a profit of $25,000 per month? What must the VC per unit be to achieve a profit of $25,000 per month? How many units must it sell to achieve a profit of $25,000 per month? What must total monthly FCs be to achieve a profit of $25,000 per month? 11. The company is considering making a deluxe model. Its price would be $156, and its VC per unit would be $100, compared to a price of $100 and a VC of $60 for the basic model. It anticipates a sales mix of 60% basic model and 40% deluxe model. How many units of the basic model and how many units of the deluxe model must the company sell to break even?
Transcribed Image Text:10. The owners have set a target profit of $25,000 per month ($300,000 per year) in order for them to decide to devote themselves full time to JW Sports Supplies. Realizing from their projected income statements that their current predictions fall short of the $25,000, they want to evaluate the impact of alternative actions. Specifically, they want to evaluate each of the following factors, separately (in doing so, assume all other factors stay the same as projected in the income statement): What price must the company set to achieve a profit of $25,000 per month? What must the VC per unit be to achieve a profit of $25,000 per month? How many units must it sell to achieve a profit of $25,000 per month? What must total monthly FCs be to achieve a profit of $25,000 per month? 11. The company is considering making a deluxe model. Its price would be $156, and its VC per unit would be $100, compared to a price of $100 and a VC of $60 for the basic model. It anticipates a sales mix of 60% basic model and 40% deluxe model. How many units of the basic model and how many units of the deluxe model must the company sell to break even?
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