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  3. 1. tenalpina is adding a new product line, which w

1. TenAlpina is adding a new product line, which will add some new revenues and...

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Accounting

1. TenAlpina is adding a new product line, which will add some new revenues and costs. Based on Guilias estimates, and assuming that the volumes for piton production and sales do not change, how many wall hammers would TenAlpina Tools have to sell in order the same annual gross margin (in dollars) as it would have if only piton were sold? That is, at what demand level for hammers would Guilia be indifferent (from a total profitability point of view) as to whether or not to add the new product line? Hint: You need to identify the incremental (relevant) revenues and costs for the hammer, and then compute the break-even point only for hammers.
Table 1
Volume
50,400
Revenue
$529,200
Materials
$73,080
Direct Labor
$345,000
Factory Overhead
Supplies
$5,544
Power
$29,808
Depreciation
$14,355
Occupancy
$33,000
Total Manufacturing costs
$500,787
Gross Margin
$28,413
5.4%

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