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Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following characteristics: Basic $ 350 $ 270 45,000 Selling price per watch Variable cost per watch Expected sales (watches) per year The total fixed costs per year for the company are $1,536,000. Flash $ 500 $ 260 15,000 Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point in units.

Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following characteristics: Basic $ 350 $ 270 45,000 Selling price per watch Variable cost per watch Expected sales (watches) per year The total fixed costs per year for the company are $1,536,000. Flash $ 500 $ 260 15,000 Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point in units.

FINANCIAL ACCOUNTING
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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Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following characteristics: Selling price per watch Variable cost per watch Expected sales (watches) per year The total fixed costs per year for the company are $1,536,000. Basic $ 350 $ 270 45,000 Required A Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point in units. c. 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? Required B Flash Complete this question by entering your answers in the tabs below. Required C $ 500 $ 260 15,000
Transcribed Image Text:Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following characteristics: Selling price per watch Variable cost per watch Expected sales (watches) per year The total fixed costs per year for the company are $1,536,000. Basic $ 350 $ 270 45,000 Required A Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point in units. c. 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? Required B Flash Complete this question by entering your answers in the tabs below. Required C $ 500 $ 260 15,000
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