26 Jun HOW MANY UNITS DOES CAITLIN NEED TO SELL TO BREAK EVEN?
Question #1 The Caitlin Corporation sells only one product. The following isbudgeted information for that product: Annual production and sales capacity (units) 30,000Budgeted selling price 30 per unitVariable cost of goods sold 8 per unitFied manufacturing costs 50,000Variable selling and administrative costs 4 per unitFied selling and administrative costs 40,000 Caitlin’s corporate ta rate is 40%. a) How many units does Caitlin need to sell to break even?b) How much revenue does Caitlin need to generate to breakeven?c) How many units does Caitlin need to sell to earn an operating profit(before taes) of 135,000?d) How much revenue does Caitlin need to generate to earn net income(after taes) of 140,400?e) Assume Caitlin is currently producing and selling 20,000 units. By whatpercentage will operating income change if sales increase by 15% from20,000 units? Be sure to provide figures to justify your answer.f) Assume Caitlin is currently producing and selling 20,000 units. By whatpercentage will operating income change if sales decrease by 10% from 20,000units? Be sure to provide figures to justify your answer. Question #2A production company is planning to sell tickets to a show for 25 each.It budgets variable costs to be 5 per attendee. Total fied costs are estimatedto be 100,000. The theatre can accommodate up to 4,000 people because ofsafety concerns. What should the production company do? Why? Be specific inyour response. Question #3The following is budgeted information for the Samantha Corporation: Product 1Product 2Annual production & sales70,00030,000Projected selling price2432Direct Production Cost InformationMaterials (per unit)810Direct Labor (per unit)24Additional information:Selling & administrative costs (a mied cost) are budgeted to be 960,000at the production and sales listed above. The variable component is 3 perunit (same for each product). Manufacturing overhead costs (a mied cost) are budgeted to be550,000 at the production and sales listed above. The fied componentis 150,000. Each product uses the same amount of variablemanufacturing overhead per unit. Assuming the budgeted sales mi remains intact, how many units of eachproduct does Samantha need to sell in order to break even? DentalPro on Wed, 2014-11-05 09:46 one time 1 10.00 A+ Answer – Epert solution body preview (0 words)file1.doc preview (619 words)Question #1 The sells one The is budgeted information for production and (units) 30,000Budgeted selling price 30 of sold unitFied manufacturing costs administrative per – – – more tet follows – – –
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