=+4-26 K CVP analysis, international cost structure differences OBJECTIVES 1, 2, 4, 5 Knitwear Ltd is considering three countries for the sole manufacturing site of its new woollen coat: Singapore, Thailand or Australia.

All woollen coats are to be sold to retail outlets in Australia at $250 per unit. These retail outlets add their own mark-up when selling to final customers. Fixed costs and variable cost per unit (woollen coat) differ in the three countries.

Country Sales price to retail outlets Annual fixed costs Variable manufacturing cost per woollen coat Variable marketing and distribution cost per woollen coat Singapore $250.00 $9 000 000 $75.00 $25.00 Thailand 250.00 8 400 000 60.00 15.00 Australia 250.00 12 400 000 82.50 12.50 Chapter 4: Cost–volume–profit analysis 155 M04_HORN3377_02_LT_C04.indd 155 2/09/13 3:22 PM Required 1 Calculate the break-even point for Knitwear Ltd in each country in:

(a) units sold and

(b) revenues.