NuBlades Manufacturing Inc. is considering the production of a new type of in-line skate. The skates sell for $80 per pair, and direct materials and direct labour will cost about $47.20 per pair. Fixed costs will increase by $984,000 per year because a new manufacturing assembly line will be required. The income tax rate is 30%.
a)What is the breakeven point for the new skate?
b)How many units must NuBlades sell to earn $492,000 after taxes?
c)List the assumptions made in this CVP analysis.

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The Answer of NuBlades Manufacturing Inc. is considering the production of a new type of in-line skate. The skates sell for $80 per pair, and direct materials and direct labour will cost about $47.20 per pair. Fixed costs will increase by $984,000 per year because a new manufacturing assembly line will be required. The income tax rate is 30%.
a)What is the breakeven point for the new skate?
b)How many units must NuBlades sell to earn $492,000 after taxes?
c)List the assumptions made in this CVP analysis.