Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following characteristics: Basic Flash Selling price per watch $ 320 $ 485 Variable cost per watch $ 240 $ 245 Expected sales (watches) per year 36,000 12,000 The total fixed costs per year for the company are $1,507,200. Required: 1. What is the anticipated level of profits for the expected sales volumes? 1. Anticipated Profit? 2. Assuming that the product mix is the same at the break-even point, compute the break-even point in units. 1. Break-even point? 3. If the product sales mix were to change to nine Basic watches for each Flash watch, what would be the new break-even volume for Woodland Wearables? 1. Break-even point?
Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following characteristics: Basic Flash Selling price per watch $ 320 $ 485 Variable cost per watch $ 240 $ 245 Expected sales (watches) per year 36,000 12,000 The total fixed costs per year for the company are $1,507,200. Required: 1. What is the anticipated level of profits for the expected sales volumes? 1. Anticipated Profit? 2. Assuming that the product mix is the same at the break-even point, compute the break-even point in units. 1. Break-even point? 3. If the product sales mix were to change to nine Basic watches for each Flash watch, what would be the new break-even volume for Woodland Wearables? 1. Break-even point?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
ff2
Transcribed Image Text:Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following characteristics:
Basic Flash
Selling price per watch $ 320 $ 485
Variable cost per watch $ 240 $ 245
Expected sales (watches) per year 36,000 12,000
The total fixed costs per year for the company are $1,507,200.
Required:
1. What is the anticipated level of profits for the expected sales volumes?
1. Anticipated Profit?
2.
Assuming that the product mix is the same at the break-even point, compute the break-even point in units.
1. Break-even point?
3. If the product sales mix were to change to nine Basic watches for each Flash watch, what would be the new break-even volume for Woodland Wearables?
1. Break-even point?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 6 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education