Annual Variable Variable Fixed Manufacturing Marketing & Costs Cost Distribution Cost Country (Millions) per Sweater

per Sweater Singapore $ 6.5 $ 8.00 $11.00 Thailand $ 4.5 $ 5.50 $11.50 United States $12.0 $13.00 $ 9.00 Selling price = $32 per unit Requirement 1. Compute the breakeven point a)units sold b)revenues 2. If company plans to produce and sell 80,000 sweaters in 2009,what will be the budgted oprative income for each m Solution: 1 breakeven points : units sold= fixed costs / Contribution margin units

location Selling price Singapore 32 Thailand 32 United States 32

Fixed Costs $ 6.5 $ 4.5 $12.0

Variable costs 19.00 17.00 22.00

Contribution Margin (u) breakeven points 13.00 500000 15.00 300000 10.00 1200000

breakeven points : revenues = fixed costs / Contribution margin ratue Fixed Costs $ 6.5 $ 4.5 $12.0 Variable costs 19.00 17.00 22.00 Contribution Margin (R) breakeven points 0.41 16000000 0.47 9600000 0.31 38400000

location Selling price Singapore 32 Thailand 32 United States 32 2

oprative income = revenues - fixed costs - variable costs Fixed Costs 6,500,000.00 4,500,000.00 12,000,000.00 Variable costs 19 17 22

location Selling price Singapore 32 Thailand 32 United States 32

quantaty $ 80,000.0 $ 80,000.0 $80,000.0

revenues 2,560,000.00 2,560,000.00 2,560,000.00

budgted oprative income for each manufacturing location.

units sweater sweater sweater

dollar $ $ $

oprative incomeollar d -3940019 $ -1940017 $ -9440022 $

Mirabella Cosmetics Operating Income Statement, June 2008 Units Sold 10,000 Revenues $100,000 Cost of Goods Sold Variable Manufacturing Costs $55,000 Fixed Manufacturing Costs 20,000 Total 75,000 Gross Margin 25,000 Operating Costs Variable Marketing Costs $ 5,000 Fixed Marketing & Administration Costs 10,000 Total Operating Costs 15,000 Operating Income $ 10,000 Requirement 1. Calculate the contribution margin percentage and breakeven point in units and revenues for June 2008. 2. What is the margin of safty (in units) for June 2008. 3. If sales in june were only $8000 units and tax rate is 30%,calculate its net income S P : 10 vc:6 CMu : 4 B E POINTu : 30000/4 7500 units CMr : .4 B E POINTr : 30000/.4 $ 75,000

revenues for June 2008.

Unit Variable Data (per pair of shoes) Annual Fixed Costs Selling Price $30.00 Rent $ 60,000 Cost of shoes $19.50 Salaries 200,000 Sales commission 1.50 Advertising 80,000 Variable cost per unit$21.00 Other fixed costs 20,000 Total fixed costs$ 360,000

Requirement 1. What is the annual breakeven point in a) units sold and b) revenues? 2. If 35000 units are sold,what will be the oprating income(loss) 3. If the sales commissions are discountinued and fixed salaries are raised by a total of $81000, what would be 4. Refer to the origional data.If, in addition to his fixed salary,the store manager is paid a commision of $0.30

total of $81000, what would be the breakeven in a) units sold b) revenues? r is paid a commision of $0.30 per unit sold, what will the breakeven in a) unit sold and b) revenues?