Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following characteristics: BasicFlashSelling price per watch$ 250$ 450Variable cost per watch$ 170$ 210Expected sales (watches) per year15,0005,000 The total fixed costs per year for the company are $1,440,000. 1. What is the anticipated level of profits for the expected sales volumes? 2. Assuming that the product mix is the same at the break-even point, compute the break-even point in units. 3. If the product sales mix were to change to nine Basic watches for each Flash watch, what would be the new break- even volume for Woodland Wearables?
Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following characteristics: BasicFlashSelling price per watch$ 250$ 450Variable cost per watch$ 170$ 210Expected sales (watches) per year15,0005,000 The total fixed costs per year for the company are $1,440,000. 1. What is the anticipated level of profits for the expected sales volumes? 2. Assuming that the product mix is the same at the break-even point, compute the break-even point in units. 3. If the product sales mix were to change to nine Basic watches for each Flash watch, what would be the new break- even volume for Woodland Wearables?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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011.
Transcribed Image Text:Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following
characteristics:
Basic FlashSelling price per watch$ 250$ 450Variable cost per watch$ 170$ 210Expected sales (watches) per
year15,0005,000
The total fixed costs per year for the company are $1,440,000.
1. What is the anticipated level of profits for the expected sales volumes?
2. Assuming that the product mix is the same at the break-even point, compute the break-even point in units.
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?
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