$2025$ Marketing Plan: $"$At the present time, we sell the product to retailers for $$11\mathrm{.}00$ per rattle. Retailers generally charge the consumers between $$12$ and $$12\mathrm{.}50.$ If we cut our selling price to retailers to $$10\mathrm{.}00,$ I expect that the product will do much better. The retailers' increased markup will give them the incentive to display our product more prominently and to promote it more vigorously to customers. We should support this strategy by supplying more promotional materials to retailers, which I expect would be an increase of $$1,200$ in Advertising and Promotion costs. Based on the price cut and the increase in advertising and promotion, I expect that we will be able to boost our sales volume by $20$ percent to $120,000$ units in $2025."$

Diana received cost data from the company's CFO, Don Capp. Don expects that the cost data below are also reliable estimates for $2025$ for a production volume up to $150,000$ units. Beyond $150,000$ units, the company would have to rent additional machines $($with a capacity of $50,000$ units each$),$ which would increase fixed manufacturing overhead costs by $$20,000$ per machine.

Part $1$

Using the information on the "Case Study" tab, answer the following questions. Include all costs $($manufacturing costs and selling and administrative costs$)$ in your calculations.

Prepare a CVP Income Statement for $2024$ using the current production and sales volume $(100,000$ rattles$)$ and the current cost data, assuming no changes to selling price or costs.

Child's Play Company

CVP Income Statement

For the Year Ended December $31,2024$

$\backslash$table$[[,$Total,Per Unit,$],[$Sales$,$$$,,,],[$Variable Costs,,,,$],[$Contribution Margin,,,,$],[$Fixed Cost,,,,$],[$Net Income,,,,$],[,,,,]]$

Determine the number of rattles the company would need to sell in $2024$ in order to break$-$even, assuming no changes to selling price or costs.

Please show your work and round to the nearest next whole unit.

$3.$ Assuming the selling price and cost changes in the Marketing Plan are adopted, prepare a CVP Income Statement for $2025,$ assuming sales and production increase by $20\%$ as outlined in the Marketing Plan.

Child's Play Company

CVP Income Statement

Assuming the selling price and cost changes in the Marketing Plan are adopted, prepare a CVP Income Statement for $2025,$ assuming sales and production increase by $20\%$ as outlined in the Marketing Plan.

Child's Play Company

CVP Income Statement

For the Year Ended December $31,2025$

Total

Per Unit

Assuming the selling price and cost changes in the Marketing Plan are adopted, determine the number of rattles the company would need to sell in $2025$ in order to break$-$even. Please show your work and round to the nearest next whole unit.

Assuming the selling price and cost changes in the Marketing Plan are adopted, determine the number of rattles the company would need to sell in $2025$ in order to earn $$400,000$ in profit. Please show your work and round to the nearest next whole unit.