Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. outback outfitters sells recreational equipment. o

Outback Outfitters sells recreational equipment. One of the company’s products, a small camp stove, sells for...

70.2K

Verified Solution

Question

Accounting

Outback Outfitters sells recreational equipment. One of thecompany’s products, a small camp stove, sells for $50 per unit.Variable expenses are $32 per stove, and fixed expenses associatedwith the stove total $108,000 per month.

Required:

1. What is the break-even point in unit sales and in dollarsales?

2. If the variable expenses per stove increase as a percentageof the selling price, will it result in a higher or a lowerbreak-even point? (Assume that the fixed expenses remainunchanged.)

3. At present, the company is selling 8,000 stoves per month.The sales manager is convinced that a 10% reduction in the sellingprice would result in a 25% increase in monthly sales of stoves.Prepare two contribution format income statements, one underpresent operating conditions, and one as operations would appearafter the proposed changes.

4. Refer to the data in (3) above. How many stoves would have tobe sold at the new selling price to attain a target profit of$35,000 per month?

Answer & Explanation Solved by verified expert
4.2 Ratings (517 Votes)
1 Break Even Units Fixed cost Contribution margin 10800018 6000 Units Contribution margin selling price variabe cost 5032 18 2 Increase    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Physics
1.2K views

A hydrogen atom and Li ion are both in th econd excited state If L...

Finance
1.2K views

an investor is evaluating the common shares od the three firms A,B and C. Expected returns,...

Accounting
1.2K views

January 1, 2018, a company is authorized to issue 200,000 shares $1.00 par common stock and...

Biology
1.2K views

Which of the following is the best definition of fermentation a the partial reduction of...

Physics
1.2K views

By providing 15kg wt one dinometer sn d one tuning fork has been ossulated to...

Geometry
1.2K views

Make a table of values using multiples of 4 for x If an answer is...

Basic Math
1.2K views

1 Given that sin cos 3 14 0 7818 use equivalent trigonometric expressions to evaluate...

Statistics
1.2K views

6 4 8 3 Boxplot Annual Mileage 11 2 15 4 thousand miles at is...

Accounting
1.2K views

Ellis Company issues 8.0%, five-year bonds dated January 1,2021, with a $530,000 par value. The...

Accounting
1.2K views

Required informntion (The forlowing information applies to the questions displayed below] Use the following information:...

Accounting
1.2K views

Management of Mittel Rhein AG of Kln, Germany, would like to reduce the amount of...

Finance
1.2K views

A hypothetical futures contract on a non-dividend paying stock with a current spot price of...