1. The Big Popys Supply manufactures memory cards that sell to wholesalers for $4.00 each. Variable and fixed costs are as follows:

Variable Costs per card:			Fixed Costs per Month:
Manufacturing
Direct materials	$0.60
Direct labor	0.50
Factory overhead	0.50
	$1.60		Factory overhead	$14,000
Selling and admin.	0.30		Selling and admin.	6,000
Total	$1.90		Total	$20,000

Big Popys Supply produced and sold 20,000 cards during October. There were no beginning or ending inventories.

Required: a. Determine Big Popy Supplys monthly break-even point in units.

b. Determine the effect on monthly profit of a 1,000 unit increase in monthly sales.

c. If Big Popy is subject to an income tax of 40 percent, determine the total dollar sales required to earn a monthly after-tax profit of $30,000.

2.- Big Popy Production Company has 200 labor-hours available. There is no limit on machine-hours. Popy can sell all of X it wants, but it can only sell 45 units and 20 units of Y and Z, respectively.

	Product X	Product Y	Product Z
Contribution margin per unit	$30	$24	$24
Labor-hours per unit	6	6	4
Machine-hours per unit	10	8	2

To maximize profits, how many units of each product should Popy produce?