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

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Question;Question #11 The Caitlin Corporation sells only one product. The following is budgeted information for that product:Annual production and sales capacity (units) 30,000Budgeted selling price $30 per unitVariable cost of goods sold $8 per unitFixed manufacturing costs $50,000Variable selling and administrative costs $4 per unitFixed selling and administrative costs $40,000Caitlin?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 #2A 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 #3The following is budgeted information for the Samantha Corporation:Product 1Product 2Annual production & sales70,00030,000Projected selling price$24$32Direct Production Cost InformationMaterials (per unit)$8$10Direct Labor (per unit)$2$4Additional 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#51957 | Written in 18-Jul-2015

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