Sportsbags Inc. makes and sells hockey bags for students. Financial projections for this line of products are revenue of $896,000, total variable costs of $242,920, and fixed costs of $595,000. (a) How much is the contribution margin and the contribution rate? (b) How much of this product line does the business need to sell to break even? (c) If the business was to save $11,000 in variable costs by offering fewer colours of hockey bags, how much of this product line does the business need to sell to break even?
Sportsbags Inc. makes and sells hockey bags for students. Financial projections for this line of products are revenue of $896,000, total variable costs of $242,920, and fixed costs of $595,000.
(a) How much is the contribution margin and the contribution rate?
(b) How much of this product line does the business need to sell to break even?
(c) If the business was to save $11,000 in variable costs by offering fewer colours of hockey bags, how much of this product line does the business need to sell to break even?
(d) If a specialized logo was printed on the hockey bags, the variable costs would increase by 3%, and the fixed costs would increase by $12,000. If the price of the hockey bags was then increased by 4%, what would be the resulting net income?
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