5. Suppose management decided to produce both products. If the two models are sold in equal proportions, and total fixed costs amount to $552,800, what is the firm’s break-even point in units? !Required informationProblem 7-51 Cost-Volume-Profit Analysis with Income Taxes and Multiple Products (Appendix) (LO 7-1, 7-2, 7-4, 7-5, 7-11)[The following information applies to the questions displayed below.]Alpine Thrills Ski Company recently expanded its manufacturing capacity. The firm will now be able to produce up to34,000 pairs of cross-country skis of either the mountaineering model or the touring model. The sales department assuresmanagement that it can sell between 28,000 and 32,000 units of either product this year. Because the models are verysimilar, the company will produce only one of the two models.The following information was compiled by the accounting department.Selling price per unitVariable costs per unitModelMountaineering$151.0088.80Touring$139.0088.80Fixed costs will total $630,400 if the mountaineering model is produced but will be only $532,200 if the touring model isproduced. Alpine Thrills Ski Company is subject to a 30 percent income tax rate.

The contribution margin is calculated as difference between sales and variable costs. The break even…

Answered: Suppose management decided to produce…

Suppose management decided to produce both products. If the two models are sold in equal proportions, and total fixed costs amount to $552,800, what is the firm’s break-even point in units?

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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