a leading firm in the sports? industry, produces basketballs forthe consumer market. For the year ended December? 31,
2017?,
Verena
sold
242,100
basketballs at an average selling price of
$41
per unit. The following information also relates to
2017
?(assume constant unit costs and no variances of any? kind):
Inventory, January 1, 2017:
29,300 basketballs
Inventory, December 31, 2017:
27,200 basketballs
Fixed manufacturing costs:
$1,200,000
Fixed administrative costs:
$3,234,000
Direct materials costs:
$12 per basketball
Direct labor costs:
$9 per basketball
1. | Calculate the breakeven point? (in basketballs?sold) in 2017 ?under: |
| a. | Variable costing |
| b. | Absorption costing |
2. | Suppose direct materials costs were $16 per basketball instead. Assuming all other data are the? same,calculate the minimum number of basketballsVerena must have sold in2017 to attain a target operating income of$110,000 ?under: |
| a. | Variable costing |
| b. | Absorption costing |
