Pierson Pet Products produces two models of dog beds: Basic and Custom. Price, cost and expected sales volume data for the two models are as follows: Basic $ 24.00 $ 17.00 66,000 Custom $59.00 $ 38.00 44,000 Selling price per bed Variable cost per bed Expected sales (beds) The total fixed costs for the company are $403,200. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the expected product mix applies regardless of total sales, compute the break-even volume. c. If the product sales mix were to change to three Basic beds for each Custom bed, what would be the new break-even volume?

Pierson Pet Products produces two models of dog beds: Basic and Custom. Price, cost and expected sales volume data for the two models are as follows: Basic $ 24.00 $ 17.00 66,000 Custom $59.00 $ 38.00 44,000 Selling price per bed Variable cost per bed Expected sales (beds) The total fixed costs for the company are $403,200. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the expected product mix applies regardless of total sales, compute the break-even volume. c. If the product sales mix were to change to three Basic beds for each Custom bed, what would be the new break-even volume?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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