What is the number of orders the company expects to receive

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Reference no: EM13788099

Tee Times, Inc. produces and sells the finest quality golf clubs in all of Moore County. The company has priced its Pinehurst No. 2 Series golf clubs at $600 per set. Normally, an order consists of one set of clubs. Based on prior experience and expected economic conditions, the company has forecast the probablities associated with different quantities of orders in an expected range, and the expected costs relevant to that range.

Number of Orders Probablilty

200 5%

300 20%

400 50%

500 20%

600 5%

Variable cost per set in the relevant range $400

Fixed costs in the relevant range $50,000

The company expects its tax rate to be 30%

1. How many sets of clubs must be sold for Tee Times, inc. to reach their breakeven point?

2. What is the number of orders the company expects to receive for a set of its Pinehurst No. 2 Series clubs?

3. What will be the net income of Tee Times, Inc. given the company's expectation of the probable number of orders?

Reference no: EM13788099

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