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Techno Designs produces head covers for golf clubs...

Description

Solution


Question

Techno Designs produces head covers for golf clubs. The company expects to generate a profit next year. It anticipates fixed manufacturing costs of $126,500 and fixed general and administrative expenses of $82,030 for the year. Variable manufacturing and selling costs per set of head covers will be $4.65 and $2.75, respectively. Each set will sell for 13.40. Compute the breakeven point in sales units. Compute the breakeven point in sales dollars. If the selling price is increased to $14 per unit and fixed general and administrative expenses are cut by $33,465, what will the new breakeven point be in units? Prepare a graph to illustrate the breakeven point computed in (2).

 

Paper#6191 | Written in 18-Jul-2015

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