Blaster Corporation manufactures hiking boots. For the coming year, the company
ID: 2373855 • Letter: B
Question
Blaster Corporation manufactures hiking boots. For the coming year, the company has budgeted the following costs for the production and sale of 30,000 pairs of boots:
Compute the sales price per unit that would result in a budgeted operating income of $900,000, assuming that the company produces and sells 30,000 pairs. (Hint: First compute the budgeted sales revenue needed to produce this operating income.)
Assuming that the company decides to sell the boots at a unit price of $121 per pair.
Compute the amount of total fixed costs budgeted for the year.
Compute the amount of variable costs per unit.
Compute the amount of the unit contribution margin.
Compute the number of pairs that must be produced and sold annually to break even at a sales price of $121 per pair.
Blaster Corporation manufactures hiking boots. For the coming year, the company has budgeted the following costs for the production and sale of 30,000 pairs of boots:
Explanation / Answer
a.
Compute the sales price per unit that would result in a budgeted operating income of $900,000, assuming that the company produces and sells 30,000 pairs. (Hint: First compute the budgeted sales revenue needed to produce this operating income.)
Sales price per unit
$105
Assuming that the company decides to sell the boots at a unit price of $121 per pair.
b-1
Compute the amount of total fixed costs budgeted for the year.
Total fixed costs
$1,020,000
b-2
Compute the amount of variable costs per unit.
Variable costs per unit
$41
b-3
Compute the amount of the unit contribution margin.
Unit contribution margin
$80
b-4
Compute the number of pairs that must be produced and sold annually to break even at a sales price of $121 per pair.
Number of units required to break even
12750
a.
Compute the sales price per unit that would result in a budgeted operating income of $900,000, assuming that the company produces and sells 30,000 pairs. (Hint: First compute the budgeted sales revenue needed to produce this operating income.)
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