(CVP single product; comprehensive) Speedy Gonzalez Inc. makes baseballs that sell for $12.50. Annual production and sales are 240,000 balls. Costs for each ball are as follows:

a. Calculate the unit contribution margin in dollars and the contribution margin ratio for the company.

b. Determine the break-even point in number of baseballs.

c. Calculate the dollar break-even point using the contribution margin ratio.

d. Determine the company’s margin of safety in number of baseballs, in sales dollars, and as a percentage.

e. Compute the company’s degree of operating leverage. If sales increase by 25 percent, by what percentage would before-tax income increase?

f. How many balls must the company sell if it desires to earn $996,450 in before-tax profit?
«J. If the company wants to earn $657,800 after tax and is subject to a 20 percent tax rate, how many balls must be sold?
h. How many balls would the company need to sell to break even if its fixed costs increased by $7,865? (Use original data.)
i- Speedy Gonzalez Inc. has received an offer to provide a one-time sale of 8,000 baseballs at $10 each to a network of sports superstores. This sale would not affect other sales, nor would the cost of those sales change. However, the variable cost of the additional units would in-

crease by $0.30 for shipping, and fixed costs would increase by $18,000. Based solely on financial information, should the company accept this offer? Show your calculations. What other factors might the company wish to consider in accepting or rejecting this offer?

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Direct material $3.00 Direct labor 1.50 Variable overhead 0.40 Variable selling expenses 1.10 Total variable cost $6.00 Total fixed overhead $589,550