Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following characteristics: Basic $ 330 $ 250 39,000 Selling price per watch Variable cost per watch Expected sales (watches) per year The total fixed costs per year for the company are $1,516,800. Flash $490 $ 250 13,000 Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point in units. c. If the product sales mix were to change to nine Basic watches for each Flash watch, what would be the new break-even volume for Woodland Wearables?

Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following characteristics: Basic $ 330 $ 250 39,000 Selling price per watch Variable cost per watch Expected sales (watches) per year The total fixed costs per year for the company are $1,516,800. Flash $490 $ 250 13,000 Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point in units. c. If the product sales mix were to change to nine Basic watches for each Flash watch, what would be the new break-even volume for Woodland Wearables?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 62P

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