Swift Outdoors is a manufacturer of outdoor items. The company is considering the possibility of offering...

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Swift Outdoors is a manufacturer of outdoor items. The company is considering the possibility of offering a new sleeping bag that would sell for $75 each. Cost to manufacture these sleeping bags includes $20 in materials and $17 in direct labor for each sleeping bag. Variable marketing and selling costs would be $8 each. In order to manufacture these sleeping bags, the company would need to incur $60,000 in fixed costs for new equipment. Required: a. Compute the break-even point of the sleeping bag in units sold. b. What would be the total revenue at the break-even point? c. How many units would Ontario need to sell to earn a profit of $12,000? d. If fixed costs in fact are $70,500 rather than $60,000, how many units would need to be sold in order to earn $12,000? Swift Outdoors is a manufacturer of outdoor items. The company is considering the possibility of offering a new sleeping bag that would sell for $75 each. Cost to manufacture these sleeping bags includes $20 in materials and $17 in direct labor for each sleeping bag. Variable marketing and selling costs would be $8 each. In order to manufacture these sleeping bags, the company would need to incur $60,000 in fixed costs for new equipment. Required: a. Compute the break-even point of the sleeping bag in units sold. b. What would be the total revenue at the break-even point? c. How many units would Ontario need to sell to earn a profit of $12,000? d. If fixed costs in fact are $70,500 rather than $60,000, how many units would need to be sold in order to earn $12,000?

Answer rating: 100% (QA)

SELLING PRICE PER UNIT 75 VARIABLE COST PER UNIT 20 17 8 8 53 ... View the full answer