CollegePak Company produced and sold 82,000 backpacks during the year just ended at an average price of $42 per unit. Variable manufacturing costs were $18.00 per unit, and variable marketing costs were $5.52 per unit sold. Fixed costs amounted to $552,000 for manufacturing and $225,600 for marketing. There was no year-end work-in-process inventory. (Ignore income taxes.) Required: 1. Compute CollegePak's break-even point in sales dollars for the year. (Do not round intermediate calculations. Round your final answer up to the nearest whole dollar.) 2. Compute the number of sales units required to earn a net income of $600,000 during the year. (Do not round intermediate calculations. Round your final answer up to the nearest whole dollar.) 3. CollegePak's variable manufacturing costs are expected to increase by 10 percent in the coming year. Compute the firm's break- even point in sales dollars for the coming year. (Do not round intermediate calculations. Round your final answer up to the nearest whole dollar) 4. If CollegePak's variable manufacturing costs do increase by 10 percent, compute the selling price that would yield the same contribution-margin ratio in the coming year. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
CollegePak Company produced and sold 82,000 backpacks during the year just ended at an average price of $42 per unit. Variable manufacturing costs were $18.00 per unit, and variable marketing costs were $5.52 per unit sold. Fixed costs amounted to $552,000 for manufacturing and $225,600 for marketing. There was no year-end work-in-process inventory. (Ignore income taxes.) Required: 1. Compute CollegePak's break-even point in sales dollars for the year. (Do not round intermediate calculations. Round your final answer up to the nearest whole dollar.) 2. Compute the number of sales units required to earn a net income of $600,000 during the year. (Do not round intermediate calculations. Round your final answer up to the nearest whole dollar.) 3. CollegePak's variable manufacturing costs are expected to increase by 10 percent in the coming year. Compute the firm's break- even point in sales dollars for the coming year. (Do not round intermediate calculations. Round your final answer up to the nearest whole dollar) 4. If CollegePak's variable manufacturing costs do increase by 10 percent, compute the selling price that would yield the same contribution-margin ratio in the coming year. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Po.25.
Transcribed Image Text:CollegePak Company produced and sold 82,000 backpacks during the year just ended at an average price of $42 per unit. Variable
manufacturing costs were $18.00 per unit, and variable marketing costs were $5.52 per unit sold. Fixed costs amounted to $552,000
for manufacturing and $225,600 for marketing. There was no year-end work-in-process inventory. (Ignore income taxes.)
Required:
1. Compute CollegePak's break-even point in sales dollars for the year. (Do not round intermediate calculations. Round your final
answer up to the nearest whole dollar.)
2. Compute the number of sales units required to earn a net income of $600,000 during the year. (Do not round intermediate
calculations. Round your final answer up to the nearest whole dollar)
3. CollegePak's variable manufacturing costs are expected to increase by 10 percent in the coming year. Compute the firm's break-
even point in sales dollars for the coming year. (Do not round intermediate calculations. Round your final answer up to the nearest
whole dollar)
4. If CollegePak's variable manufacturing costs do increase by 10 percent, compute the selling price that would yield the same
contribution-margin ratio in the coming year. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
1. Break-even point
2. Number of sales
3.
Break-even point
4. Selling price
units
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