The following data relate to a year's budgeted activity for Patsy Corporation, a single product company:

{Required:}
Total fixed costs remain unchanged within the relevant range of 25,000 units. Total capacity is 160,000 units.

(a) What is the projected net income for Patsy Corporation for the year under direct (variable) costing?

(b) If all the variances are charged to cost of goods sold, what is the projected net income for Patsy Corporation for the year under absorption costing?

(c) What is the projected annual breakeven sales in units?

(d) Patsy has received a special order for 10,000 units to be sold in an unrelated market. What price per unit should be charged on this order to increase Patsy's net income by \(\$ 5,000\) ?

(e) Given the above data for Patsy Corporation, assume the selling price increases by \(20 \%\); variable manufacturing costs increase by \(10 \%\); variable selling costs remain the same; and total fixed costs increase to \(\$ 104,400\). How many units must then be sold to generate a profit equal to \(10 \%\) of the contribution margin?

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Beginning inventory.... Production. Available......... Sales........ Ending inventory... Selling price....... Variable manufacturing costs. Variable selling costs Units 30,000 120,000 150,000 110,000 10,000 Per Unit $5.00 $1.00 $2.00 Fixed manufacturing costs (based on 100,000 units) $ .25 Fixed selling costs (based on 100,000 units)................ $ .65