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Calculate rogue outdoor break-even point

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Q1. Calculate Rogue Outdoor's break-even point in units and dollars for selling hiking shoes if:

  • Average per unit variable cost (Wholesale price Rogue pays for hiking shoes): $50
  • Total fixed costs assigned to hiking shoes: $36,000
  • Average per unit revenue (price) of hiking shoes: $100

Q2. Calculate the maximum wholesale price that the Rogue Outdoor can afford in order to earn a 30% profit margin on the sale of its hiking shoes if:

  • $100 MSRP
  • Using the variable and fixed costs in the previous problem
  • (Note: the simple formula in the textbook fails to take into account the fixed costs per unit)

Reference no: EM131734331

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