Outback Outfitters sells a small camp stove for $90 per unit. Variable expenses are $63 per unit, and fixed expenses total $113 month. Required: 1. What is the break-even point in unit sales and in dollar sales? 2. If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or a lower break-eve (Assume the fixed expenses remain unchanged.) 3. At present, the company is selling 19,000 stoves per month. The sales manager is convinced a 10% reduction in the selling p would result in a 25% increase in unit sales. Prepare two contribution format income statements, one under present operatin conditions, and one as operations would appear after the proposed changes. 4. Refer to the data in Required 3. How many stoves would have to be sold at the new selling price to attain a target profit of $3 per month? Complete this question by entering your answers in the tabs below.
Outback Outfitters sells a small camp stove for $90 per unit. Variable expenses are $63 per unit, and fixed expenses total $113 month. Required: 1. What is the break-even point in unit sales and in dollar sales? 2. If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or a lower break-eve (Assume the fixed expenses remain unchanged.) 3. At present, the company is selling 19,000 stoves per month. The sales manager is convinced a 10% reduction in the selling p would result in a 25% increase in unit sales. Prepare two contribution format income statements, one under present operatin conditions, and one as operations would appear after the proposed changes. 4. Refer to the data in Required 3. How many stoves would have to be sold at the new selling price to attain a target profit of $3 per month? Complete this question by entering your answers in the tabs below.
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 7EB: Delta Co. sells a product for $150 per unit. The variable cost per unit is $90 and fixed costs are...
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Question
![Outback Outfitters sells a small camp stove for $90 per unit. Variable expenses are $63 per unit, and fixed expenses total $113,400 per
month.
Required:
1. What is the break-even point in unit sales and in dollar sales?
2. If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or a lower break-even point?
(Assume the fixed expenses remain unchanged.)
3. At present, the company is selling 19,000 stoves per month. The sales manager is convinced a 10% reduction in the selling price
would result in a 25% increase in unit sales. Prepare two contribution format income statements, one under present operating
conditions, and one as operations would appear after the proposed changes.
4. Refer to the data in Required 3. How many stoves would have to be sold at the new selling price to attain a target profit of $72,000
per month?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2 Required 3
What is the break-even point in unit sales and in dollar sales?
Break-even point in unit sales
Break-even point in dollar sales
Required 4
Stoves](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdbe3e682-0170-4e5e-a448-703bb6b4ca93%2F31ca6950-fc93-41d1-8bd5-685e68126a39%2F80d5q60g_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Outback Outfitters sells a small camp stove for $90 per unit. Variable expenses are $63 per unit, and fixed expenses total $113,400 per
month.
Required:
1. What is the break-even point in unit sales and in dollar sales?
2. If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or a lower break-even point?
(Assume the fixed expenses remain unchanged.)
3. At present, the company is selling 19,000 stoves per month. The sales manager is convinced a 10% reduction in the selling price
would result in a 25% increase in unit sales. Prepare two contribution format income statements, one under present operating
conditions, and one as operations would appear after the proposed changes.
4. Refer to the data in Required 3. How many stoves would have to be sold at the new selling price to attain a target profit of $72,000
per month?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2 Required 3
What is the break-even point in unit sales and in dollar sales?
Break-even point in unit sales
Break-even point in dollar sales
Required 4
Stoves
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