Thomas Inc. is considering three countries for the sole manufacturing site of its new product: India, China,

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Thomas Inc. is considering three countries for the sole manufacturing site of its new product: India, China, and Canada. The product will be sold to retail outlets in Canada at $47.50 per unit. These retail outlets add their own markup when selling to final customers. The three countries differ in their fixed costs and variable costs per product.

Thomas Inc. is considering three countries for the sole manufacturing

Required
1. Compute the breakeven point of Thomas Inc. in both (a) units sold and (b) revenues for each of the three countries considered.
2. If Thomas Inc. sells 1,350,000 units in 2016, what is the budgeted operating income for each of the three countries considered?
3. What level of sales (in units) would be required to produce the same operating income in China and in Canada? What would be the operating income in India at that volume of sales?

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Cost Accounting A Managerial Emphasis

ISBN: 978-0133138443

7th Canadian Edition

Authors: Srikant M. Datar, Madhav V. Rajan, Charles T. Horngren, Louis Beaubien, Chris Graham

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