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The Caitlin Corporation sells only one product.....

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Question #1;1 The Caitlin Corporation sells only one product. The following is budgeted information for that product;Annual production and sales capacity (units) 30,000;Budgeted selling price $30 per unit;Variable cost of goods sold $8 per unit;Fixed manufacturing costs $50,000;Variable selling and administrative costs $4 per unit;Fixed selling and administrative costs $40,000;Caitlin?s corporate tax rate is 40%.;a) How many units does Caitlin need to sell to breakeven?;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 taxes) of $135,000?;d) How much revenue does Caitlin need to generate to earn net income (after taxes) of $140,400?;e) Assume Caitlin is currently producing and selling 20,000 units. By what percentage will operating income change if sales increase by 15% from 20,000 units?Be sure to provide figures to justify your answer.;f) Assume Caitlin is currently producing and selling 20,000 units. By what percentage will operating income change if sales decrease by 10% from 20,000 units?Be sure to provide figures to justify your answer.;Question #2;A production company is planning to sell tickets to a show for $25 each. It budgets variable costs to be $5 per attendee. Total fixed costs are estimated to be $100,000. The theatre can accommodate up to 4,000 people because of safety concerns. What should the production company do? Why? Be specific in your response.;Question #3;The following is budgeted information for the Samantha Corporation;Product 1;Product 2;Annual production & sales;70,000;30,000;Projected selling price;$24;$32;Direct Production Cost Information;Materials (per unit);$8;$10;Direct Labor (per unit);$2;$4;Additional information;Selling & administrative costs (a mixed cost) are budgeted to be $960,000 at the production and sales listed above. The variable component is $3 per unit (same for each product).;Manufacturing overhead costs (a mixed cost) are budgeted to be $550,000 at the production and sales listed above. The fixed component is $150,000. Each product uses the same amount of variable manufacturing overhead per unit.;Assuming the budgeted sales mix remains intact, how many units of each product does Samantha need to sell in order to break even?

 

Paper#18831 | Written in 18-Jul-2015

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