Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have
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Question:
Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following characteristics:
| Basic | Flash | |
|---|---|---|
| Selling price per watch | $ 350 | $ 500 |
| Variable cost per watch | $ 270 | $ 260 |
| Expected sales (watches) per year | 45,000 | 15,000 |
The total fixed costs per year for the company are $1536000.
Required:
- What is the anticipated level of profits for the expected sales volumes?
- Assuming that the product mix is the same at the break-even point, compute the break-even point in units.
- 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?
Expert Answer:
Answer Explanation I The computation of anticipated level of profits at the giv... View the full answer
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