Reliable Racket Company manufactures tennis rackets. During a given year, fixed costs are expected to be...

 

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Reliable Racket Company manufactures tennis rackets. During a given year, fixed costs are expected to be $150,000. Each racket requires $10 of variable cost to produce and will be sold to retail outlets for $15. a) What is the breakeven point in units and dollars? Show computations. Prepare CM income statement. b) How many rackets must be sold to earn an annual profit of $25,000? Show computation. Prepare CM income statement. c) If 25,000 rackets are sold in a given year and fixed costs are increased by 10%, what is the operating income or loss? Show computation. Prepare CM income statement. Please note: For each income statement above, you must show number of units X $ per unit where appropriate. Reliable Racket Company manufactures tennis rackets. During a given year, fixed costs are expected to be $150,000. Each racket requires $10 of variable cost to produce and will be sold to retail outlets for $15. a) What is the breakeven point in units and dollars? Show computations. Prepare CM income statement. b) How many rackets must be sold to earn an annual profit of $25,000? Show computation. Prepare CM income statement. c) If 25,000 rackets are sold in a given year and fixed costs are increased by 10%, what is the operating income or loss? Show computation. Prepare CM income statement. Please note: For each income statement above, you must show number of units X $ per unit where appropriate.

Answer rating: 100% (QA)

a Breakeven point in units Fixed costs Price per unit Variable cost per unit 150000 15 10 30000 unit... View the full answer