Minden Company manufactures a high-quality wooden birdhouse that sells for $20 per unit. The variable costs are $6 per unit and the company sold 42,000 of the birdhouses to customers in 2026. The break-even point in 2026 was 12,000 birdhouses. The president of Minden Company believes the following changes should be made in 2027: 1. the selling price of the birdhouse should be decreased by 10% 2. increase advertising by $30,000 Assume these changes are made. Calculate the number of birdhouses Minden Company must sell in 2027 in order to earn a target profit equal to 25% of sales.
Minden Company manufactures a high-quality wooden birdhouse that sells for $20 per unit. The variable costs are $6 per unit and the company sold 42,000 of the birdhouses to customers in 2026. The break-even point in 2026 was 12,000 birdhouses. The president of Minden Company believes the following changes should be made in 2027: 1. the selling price of the birdhouse should be decreased by 10% 2. increase advertising by $30,000 Assume these changes are made. Calculate the number of birdhouses Minden Company must sell in 2027 in order to earn a target profit equal to 25% of sales.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Dd.80.
Transcribed Image Text:Minden Company manufactures a high-quality wooden birdhouse that
sells for $20 per unit. The variable costs are $6 per unit and
the company sold 42,000 of the birdhouses to customers in 2026.
The break-even point in 2026 was 12,000 birdhouses.
The president of Minden Company believes the following changes
should be made in 2027:
1. the selling price of the birdhouse should be decreased by 10%
2. increase advertising by $30,000
Assume these changes are made. Calculate the number of birdhouses
Minden Company must sell in 2027 in order to earn a target profit
equal to 25% of sales.
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