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?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 10E: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22...
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