3. How much would the variable cost per unit of the touring model have to change before it had the same break-even point in units as the mountaineering model? 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 variable cost per unit is the amount of labor, materials, and other resources required to…

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variable cost per unit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Management by Exception

A manager’s job is a very tough one. A manager needs to look at the various areas of work and as a manager he has to look after two or more important jobs or activities at the same time for the growth of the business. In order to do all these things in an effective manner, a manager must adopt or practice different management styles and tactics.

Question

3. How much would the variable cost per unit of the touring model have to change before it had the same break-even point in units as the mountaineering model?

Required information
Problem 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 to
34,000 pairs of cross-country skis of either the mountaineering model or the touring model. The sales department assures
management that it can sell between 28,000 and 32,000 units of either product this year. Because the models are very
similar, the company will produce only one of the two models.
The following information was compiled by the accounting department.
Selling price per unit
Variable costs per unit
Model
Mountaineering
$151.00
88.80
Touring
$139.00
88.80
Fixed costs will total $630,400 if the mountaineering model is produced but will be only $532,200 if the touring model is
produced. Alpine Thrills Ski Company is subject to a 30 percent income tax rate.

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