Identify the place where these activities would take place using the options from the list. Questions Modelo Esquiamos. Example answer Es una montaña.

A. 563 snowboards

B. $120

C. Incremental Profit:$32,000

Explanation:

Volume to meet target profit = (Target Profit + Fixed Cost) / Contribution per unit

Calculation of Contribution per unit

Revenue                                             $150,000

Less Variable Costs ;

Variable production costs                ($60,000)

Variable selling and administration  ($10,000)

Contribution                                        $80,000

Contribution per unit = $80,000 / 500 snowboards

                                   = $160

Volume to meet target profit = ($30,000 + $25,000 + $35,000) / $160

                                                = 562.50 or 563 snowboards

For the Additional Snowboats,Snowbird's managers are willing to pay a price close to cost of making the regular snowboards internally.

Cost of Making :

Variable production costs ($60,000 / 500) = $120

Total Cost                                                       = $120

Therefore, Snowbird's managers are willing to pay $120

For Incremental Profit or Loss, prepare a differential analysis for the additional 200 snowboards.

Differential analysis for the additional 200 snowboards

Sales (200 snowboards × $300)                                             $60,000

Less Incremental Production Costs ( 200 × $120)                ($24,000)

Less Incremental selling and administration (200 × $20)      ($4,000)

Incremental Profit                                                                     $32,000