Reference no: EM132500827

TrailPacker is thinking of increasing sales by offering backpacks with aluminum frames. The investment needed for adding aluminum frames to their manufacturing process would increase fixed overhead costs by $50,000 per month. The variable materials cost (only variable material costs - not all variable costs) would increase by $15.00 per backpack. Market research estimates that the aluminum frame backpacks would sell for $70 each, and volume would increase 10%.

Question A) a revised monthly Contribution Margin Income Statement to include the revenues, detailed costs and income if TrailPacker chooses to manufacture and sell backpacks with aluminum frames instead of their regular backpacks.

Question B) What is the new break-even point in units for the aluminum frame backpacks?

Question C) What is the new break-even point in sales dollars for the aluminum frame backpacks?

Question D) If volume did not increase when making the aluminum frame backpacks (stayed the same as original monthly volume), is TrailPacker better off producing aluminum frame backpacks or their basic backpacks? your answer with data in contribution margin income statement format.