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Calculate the breakeven point?

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Reference no: EM133201804

Camino, a leading firm in the sports? industry, produces basketballs for the consumer market. For the year ended December? 31, 2017?, Camino sold 400,000 basketballs at an average selling price of $12 per unit. The following information also relates to 2017 (assume constant unit costs and no variances of any?kind):

Inventory, January 1, 2017:

0 basketballs

Inventory, December 31, 2017:

20,000 basketballs

Fixed manufacturing costs:

$380,000

Fixed administrative costs:

$660,000

Direct materials costs:

$3 per basketball

Direct labor costs:

$4 per basketball

Requirements

1. Calculate the breakeven point? (in basketballs? sold) in 2017 ?under:

2. Suppose direct materials costs were $4 per basketball instead. Assuming all other data are the? same, calculate the minimum number of basketballs Camino must have sold in 2017 to attain a target operating income of $120,000

Part 1

Requirement 1. Calculate the breakeven point? (in basketballs? sold) in 2017 ?under: (a) Variable costing and? (b) Absorption costing.

a. Calculate the breakeven point in units under variable costing.

Reference no: EM133201804

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