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  3. outback outfitters sells a small camp stove for $1

Outback Outfitters sells a small camp stove for $100 per unit. Variable expenses are $70...

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Accounting

Outback Outfitters sells a small camp stove for $100 per unit. Variable expenses are $70 per unit, and fixed expenses total $123,000 per month.
Required:
What is the break-even point in unit sales and in dollar sales?
If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or a lower break-even point? (Assume the fixed expenses remain unchanged.)
At present, the company is selling 11,000 stoves per month. The sales manager is convinced a10% reduction in the selling price would result ina25% increase in unit sales. Prepare two contribution format income statements, one under present operating conditions, and one as operations would appear after the proposed changes.
Refer to the data in Required 3. How many stoves would have tobe sold at the new selling price to attain a target profit of $75,000 per month? At present, the company is selling 11,000 stoves per month. The sales manager is convinced a10% reduction in the selling price would result ina25% increase in unit sales. Prepare two contribution format income statements, one under present operating conditions, and one as operations would appear after the proposed changes.
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