Outback Outfitters sells recreational equipment. One of the company's products, a small camp stove, sells for $150 per unit. Variableexpenses are $105 per stove, and fixed expenses associated with the stove total $216,000 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 that the fixed expenses remain unchanged.)3. At present, the company is selling 18,000 stoves per month. The sales manager is convinced that a 10% reduction in the selling pricewould result in a 25% increase in monthly sales of stoves. Prepare two contribution format income statements, one under presentoperating 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 $72,000per month?Complete this question by entering your answers in the tabs below.Required 1Required 2Required 3Break-even point in unit salesBreak-even point in dollar salesWhat is the break-even point in unit sales and in dollar sales?Required 4$4,800720,000Required 1Required 2 >

1. Calculation of Break even point in units and dollar sales: ParticularsRateSales…

Answered: Required: 1. What is the break-even…

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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