Belham Company produces and sells disposable foil baking pans to retailers for $3.45 per pan. The variable cost per pan is as follows:

Direct materials................................. $0.67
Direct labor.......................................... 0.86
Variable factory overhead................. 0.63
Variable selling expense.................... 0.19

Fixed manufacturing cost totals $111,425 per year. Administrative cost (all fixed) totals $48,350.

Required:
1. Compute the number of pans that must be sold for Belham to break even.
2. What is the unit variable cost? What is the unit variable manufacturing cost? Which is used in cost-volume-profit analysis and why?
3. How many pans must be sold for Belham to earn operating income of $14,300?
4. How much sales revenue must Belham have to earn operating income of $14,300?
5. Suppose that Belham Company could reduce direct labor cost to $0.80 per unit. What is the new break-even point in units? How many units must be sold to earn operating income of $14,300?
6. Ignoring requirement 5, suppose that Belham Company’s fixed administrative costs increased to $50,000. What is the new break-even point in units? How many units must be sold to earn operating income of $14,300?