Break-even point, what-if analysis Air Peanut Company manufactures and sells roasted peanut packets to commercial airlines. Price and cost data per 100 packets of peanuts follow:

Estimated annual sales volume = 1 1,535,700 packetsREQUIRED

(a) Determine Air Peanut's break-even point.

(b) How many packets does Air Peanut have to sell to earn $156,000?

(c) Air Peanut expects its direct labor costs to increase by 5% next year. How many units will it have to sell next year to break even if the selling price re¬ mains unchanged?

(d) If Air Peanut's direct labor costs increase by 5%, what selling price must it charge to maintain the same contribution margin to sales ratio?

(LO 8)

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Selling price Flexible costs: Raw materials Manufacturing support Direct labor Selling expenses Total flexible costs per batch Annual capacity-related costs: Manufacturing support. Selling and administrative Total capacity-related costs $35.00 $16.00 7.00 4.00 1.60 $28.60 $192,000 276,000 $468,000