Richmond Hill Geese Inc. makes and sells top of the line winter jackets for $500. Variable...

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Richmond Hill Geese Inc. makes and sells top of the line winter jackets for $500. Variable costs are $240 per jacket and fixed costs are $780,000. (10 marks) a) How many jackets must they sell to just breakeven? b) How much profit would they make if they sell 5,000 jackets? c) They are now considering making a better-quality jacket that would increase variable costs to $300 AND increasing the price 40% (to $700). How many jackets would they need to sell to make the same amount of money they made in part b. d) How many less jackets is the answer in part e from the original 5,000? e) What is the percentage allowable decline in sales that sees them make the same amount of profit as before. f) If they think sales will decline 20% (from the original sales of 5,000), is this a good idea? Richmond Hill Geese Inc. makes and sells top of the line winter jackets for $500. Variable costs are $240 per jacket and fixed costs are $780,000. (10 marks) a) How many jackets must they sell to just breakeven? b) How much profit would they make if they sell 5,000 jackets? c) They are now considering making a better-quality jacket that would increase variable costs to $300 AND increasing the price 40% (to $700). How many jackets would they need to sell to make the same amount of money they made in part b. d) How many less jackets is the answer in part e from the original 5,000? e) What is the percentage allowable decline in sales that sees them make the same amount of profit as before. f) If they think sales will decline 20% (from the original sales of 5,000), is this a good idea?

Answer rating: 100% (QA)

Contribution Margin per Jacket Selling price per Jacket Variable Cost per Jacket Contribution M... View the full answer