Snug-As-A-Bug manufactures sleeping bags. For the coming year, the company has budgeted the following costs for the production and sale of 80,000 units:

Instructions
a. Compute the sales price per unit that would result in a budgeted operating income of $560,000, assuming that the company produces and sells 80,000 bags.
b. Assuming that the company decides to sell the sleeping bags at a unit price of $71 per unit, compute the following:
1. Total fixed costs budgeted for the year.
2. Variable cost per unit.
3. The unit contribution margin.
4. The number of bags that must be produced and sold annually to break even at a sales price of $71 per unit.

Transcribed Image Text:

Percentage of Costs Variable 100% 100 10 40 Budgeted Costs per Unit $18 Budgeted ts Considered Costs Direct materials Diect labor Manufacturing overhead (fixed and variable) Selling and administrative expenses.. .. $1,440,000 160,000 2,400,000 800,000 $4,800,000 2 30 10 $60 - Totals