CollegePak’s company produced and sold 60,000 backpacks during the year just ended at an average price of $ 20 per unit. Variable manufacturing costs was $ 8 per unit and variable marketing costs were $ 4 per unit sold. Fixed costs amounted to $ 180,000 for manufacturing and $ 72,000 for marketing. Required 1. Compute the CollegePak’s breakeven point in sales dollars for the year. 2. Compute the number of sales unit required to earn a net income of $1, 80,000 during the year. 3. CollegePak’s variable manufacturing costs are expected to increase by 10 percent in the coming year. Compute the firm’s breakeven point in sales dollars for the coming year.
CollegePak’s company produced and sold 60,000 backpacks during the year just ended at an
average price of $ 20 per unit. Variable
marketing costs were $ 4 per unit sold. Fixed costs amounted to $ 180,000 for manufacturing
and $ 72,000 for marketing.
Required
1. Compute the CollegePak’s breakeven point in sales dollars for the year.
2. Compute the number of sales unit required to earn a net income of $1, 80,000 during
the year.
3. CollegePak’s variable manufacturing costs are expected to increase by 10 percent in
the coming year. Compute the firm’s breakeven point in sales dollars for the coming
year.
4. If CollegePak’s variable manufacturing costs do increase by 10 percent, compute the
the selling price that would yield the same contribution – margin ratio in the coming year.
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