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##### The Caitlin Corporation sells only one product. The following is

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Question #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#76035 | Written in 18-Jul-2015

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