Alpine Thrills Ski Company recently expanded its manufacturing capacity. The firm will now be able to produce up to 23,000 pairs of cross-country skis of either the mountaineering model or the touring model. The sales department assures management that it can sell between 17,000 and 21,000 units of either product this year. Because the models are very similar, the company will produce only one of the two models. The following information was compiled by the accounting department. Model Selling price per unit Variable costs per unit Mountaineering $ 140.00 83.40 Touring $ 128.00 83.40 Fixed costs will total $586,400 if the mountaineering model is produced but will be only $499,200 if the touring model is produced. Alpine Thrills Ski Company is subject to a 35 percent income tax rate. 5. Suppose management decided to produce both products. If the two models are sold in equal proportions, and total fixed costs amount to $530,800, what is the firm's break-even point in units? (Do not round intermediate calculations and round your final answer up to nearest whole number.)
Alpine Thrills Ski Company recently expanded its manufacturing capacity. The firm will now be able to produce up to 23,000 pairs of cross-country skis of either the mountaineering model or the touring model. The sales department assures management that it can sell between 17,000 and 21,000 units of either product this year. Because the models are very similar, the company will produce only one of the two models. The following information was compiled by the accounting department. Model Selling price per unit Variable costs per unit Mountaineering $ 140.00 83.40 Touring $ 128.00 83.40 Fixed costs will total $586,400 if the mountaineering model is produced but will be only $499,200 if the touring model is produced. Alpine Thrills Ski Company is subject to a 35 percent income tax rate. 5. Suppose management decided to produce both products. If the two models are sold in equal proportions, and total fixed costs amount to $530,800, what is the firm's break-even point in units? (Do not round intermediate calculations and round your final answer up to nearest whole number.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Alpine Thrills Ski Company recently expanded its manufacturing capacity. The firm will now be able to produce up to 23,000 pairs of
cross-country skis of either the mountaineering model or the touring model. The sales department assures management that it can sell
between 17,000 and 21,000 units of either product this year. Because the models are very similar, the company will produce only one of
the two models.
The following information was compiled by the accounting department.
Model
Mountaineering
Selling price per unit $
Variable costs per unit
140.00
83.40
Touring
$
128.00
83.40
Fixed costs will total $586,400 if the mountaineering model is produced but will be only $499,200 if the touring model is produced.
Alpine Thrills Ski Company is subject to a 35 percent income tax rate.
5. Suppose management decided to produce both products. If the two models are sold in equal proportions, and total fixed costs
amount to $530,800, what is the firm's break-even point in units? (Do not round intermediate calculations and round your final answer
up to nearest whole number.)
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