Reference no: EM132240964

Question - Pharoah Snowboards converts regular snowboards by adding outriggers and seats so that people who use wheelchairs can snowboard. The income statement for last year, in which 510 snowboards were produced and sold, appears here:

Revenue $168,300

Expenses Variable production costs $61,710

Fixed production costs 22,800

Variable selling and administration 9,690

Fixed selling and administration 37,300, 131,500

Income $36,800

(A) What volume of snowboards must be sold to earn pretax profits of $32,400?

(B) Pharoah's supplier of snowboards is unable to ship more than 510 boards for the upcoming season. Pharoah has been paying the supplier $83 for each snowboard. (The cost of the snowboards is included in variable production costs.) More expensive snowboards are available from other manufacturers for conversion. If Pharoah's managers expect to sell more than 510 converted snowboards in the upcoming season, what is the most they would be willing to pay outside suppliers for each additional snowboard?

(C) Suppose Pharoah pays the price you calculated in the previous part and sells an additional 180 snowboards. What is the company's incremental profit on the 180 snowboards?