CVP, international cost structure differences. Knitwear, Inc., is considering three coun¬

tries for the sole manufacturing site ofits new sweater: hingapore, Thailand, and Canada. All sweaters are to be sold to retail outlets in Canada at $38.40 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 sweater.

Annual Fixed Costs Variable Manufacturing Costs per Sweater Variable Marketing and Distribution Costs per Sweater Singapore $ 7.8 million $ 9.60 $13.20 Thailand 5.4 million 6.60 13.80 Canada 14.4 million 15.60 10.80 Required 1. Compute the breakeven point of Knitwear, Inc., in both

(a) units sold and

(b) revenues for each ofthe three countries considered for manufacturing the sweaters.

2. If Knitwear, Inc., sells 800,000 sweaters in 2008, what is the budgeted operating income for each of the three countries considered for manufacturing the sweaters? Comment on the results.