50.1K

Verified Solution

Link Copied!

College Pak Company produced and sold 75,000 backpacks during the year just ended at an average price of $35 per unit. Variable manufacturing costs were $14.50 per unit, and variable marketing costs were $6.50 per unit sold. Fixed costs amounted to $545,000 for manufacturing and $220,000 for marketing. There was no year-end work-in-process inventory. (Ignore income taxes.) Required: 1. Compute College Pak's break-even point in sales dollars for the year. (Do not round Intermediate calculations. Round your final answer up to the nearest whole dollar.) 2. Compute the number of sales units required to earn a net income of $565.000 during the year. (Do not round Intermediate calculations. Round your final answer up to nearest whole number.) 3. College Pak's variable manufacturing costs are expected to increase by 10 percent in the coming year. Compute the firm's break- even point in sales dollars for the coming year. (Do not round Intermediate calculations. Round your final answer up to the nearest whole dollar.) 4. If College Pak's variable manufacturing costs do increase by 10 percent, compute the selling price that would yield the same contribution-margin ratio in the coming year. (Do not round Intermediate calculations. Round your final answer to 2 decimal places.) 1. Break-even point 2. Number of sales 3. Break-even point 4. Selling price

Answer & Explanation Solved by verified expert

See Answer