Prachi Company produces and sells disposable foil baking pans to retailers for $2.45 per pan. The variable costs per pan are as follows:

Direct materials ........$0.27

Direct labor ..........0.58

Variable overhead ......0.63

Variable selling .......0.17

Fixed manufacturing costs total $131,650 per year. Administrative costs (all fixed) total $18,350.

Required:

1. Compute the number of pans that must be sold for Prachi to break even.

2. What is the unit variable cost? What is the unit variable manufacturing cost? Which is used in cost-volume-profit analysis and why?

3. How many pans must be sold for Prachi to earn operating income of $12,600?

4. How much sales revenue must Prachi have to earn operating income of $12,600?