kalifo comapny manufacures a line of electric garden tools that hardware store sell The company's controller, will Fulton has just received the upcoming years sales forcast for the firm's three products , weeders, Clippers, and Blowers Kalifo has experineced cosiderable variation in sales voluomes and variable cost over the past two years and Fulton believes that the forecat should be carefully evaluated from a cost vouome profit view point, the preliminary budget information for the next year
- Weeders Clippers Blowers
- Unit sales 40,000 40,000 80,000
- unit selling price $ 80 $ 110 $ 135
- Variable manufacuring cost per unit $ 53 $ 69 $ 77
- Varaible selling cost per unit $ 5 4 6
The committed manufacuring overhead is budgeted at $ 3,200,000 and the company's committed selling and administrative are forecast to be $ 1,600,000 Kalifo has a tax rate of 40 percent
A Estimate the comapny's budgeted net income for next year
B assuming that the sales mix remains as budgeted determine how many units of each product must company sell to break even
C after preparing the original estimated management detrmined that the variable manufacuring cost of Blowers will increase by 20 percent and variabl selling cost of Clippers will increase by 40 percent, however management decided not to change the selling price of either products, in addition management recently learned that the firm'sBlowers has been rated as the best value on the market and the company now expectes to sell three times as many Blowers as each of the other products, determine how many units of each product must company sells to break even.