Question

Outback Outtitters sells recr associated with the stove total $118,800 per month reational equipment One of the company's products, a smail camp stove, sets for $0 per unt Varable expenses are 563 per stove, and foed expenses Required: the company's break-even point in unit sales and in dolar sales. Number of stoves Total sales dollars 2. Ir the varable espenses per stove increase as a percentage of the selling prke. wit t result in a higher or a lower break even point? (Assume that the foed expenses remain unchanged) O Higher break-even point O Lower breakeven point 3 At present the company sein g 10,000 stoves per month The sales manager convinced that a 10% reducton in the seing price would resut n a 25% increase in monthy sales of stoves Prepare two contribution trmat income statements one under present operanng conditon·ard one as opertos would appear r the proposed changes Present 10,000 Stoves

Answer 1

Explanations are provided for calculating breakeven point in units and dollar sales. Answers are at the end of every calculations.