Baldwin has a new design for their product Bold next round that can reduce their material cost of producing units from $8.14 to $7.32. Baldwin passes on half of all cost savings by cutting the current price to customers. For simplicity: - Use current labor costs of $3.94 - Assume all period costs as reported on Baldwin's Income Statement (Annual Rpt Pg 2) will remain the same. Determine how many units (000) of product Bold would need to be sold next round to break even on the product.

Select: 1

973 units.

779 units.

1,031 units.

1,194 units.

922 units.

1,265 units.

Selected Financial Statistics

	Andrews	Baldwin	Chester	Digby
ROS	11.8%	-1.2%	11.7%	-0.3%
Asset Turnover	1.05	0.70	1.23	0.67
ROA	12.5%	-0.8%	14.4%	-0.2%
Leverage (Assets/Equity)	1.6	2.5	1.7	2.6
ROE	19.5%	-2.1%	25.1%	-0.5%
Emergency Loan	$0	$0	$0	$0
Sales	$235,646,438	$159,956,277	$185,369,603	$136,893,827
EBIT	$51,259,512	$13,493,001	$40,517,037	$14,815,814
Profits	$27,894,334	($1,907,058)	$21,735,682	($378,921)
Cumulative Profit	$47,046,416	$1,240,885	$46,393,546	$1,445,987
SG&A / Sales	11.5%	12.9%	7.1%	9.8%
Contrib. Margin %	42.0%	37.2%	37.9%	36.8%

COMP-XM INQUIRER	Page 1

nnual Report	Baldwin	C59559	Round: 3 Dec. 31, 2022

2022 Income Statement

(Product Name:)	Bid	Bold	Buddy	Bat	Beetle	Bill	Na	Na	2022 Total	Common Size
Sales	$15,392	$33,249	$29,676	$28,226	$31,160	$22,253	$0	$0	$159,956	100.0%
Variable Costs:
Direct Labor	$1,813	$7,028	$6,419	$4,996	$8,192	$4,473	$0	$0	$32,923	20.6%
Direct Material	$5,538	$14,801	$12,289	$10,397	$13,293	$9,396	$0	$0	$65,714	41.1%
Inventory Carry	$294	$372	$378	$566	$88	$46	$0	$0	$1,745	1.1%
Total Variable	$7,645	$22,201	$19,087	$15,959	$21,574	$13,915	$0	$0	$100,382	62.8%
Contribution Margin	$7,747	$11,047	$10,589	$12,267	$9,587	$8,337	$0	$0	$59,575	37.2%
Period Costs:
Depreciation	$3,833	$4,600	$2,040	$1,927	$2,635	$2,475	$0	$0	$17,509	10.9%
SG&A: R&D	$983	$0	$973	$973	$995	$114	$0	$0	$4,039	2.5%
Promotions	$1,140	$1,140	$1,140	$1,140	$1,140	$1,140	$0	$0	$6,840	4.3%
Sales	$1,000	$1,000	$1,900	$2,200	$900	$900	$0	$0	$7,900	4.9%
Admin	$183	$395	$352	$335	$370	$264	$0	$0	$1,899	1.2%
Total Period	$7,139	$7,135	$6,406	$6,575	$6,040	$4,893	$0	$0	$38,187	23.9%
Net Margin	$608	$3,913	$4,183	$5,692	$3,546	$3,445	$0	$0	$21,387	13.4%

Definitions: Sales: Unit sales times list price. Direct Labor: Labor costs incurred to produce the product that was sold. Inventory Carry Cost: the cost to carry unsold goods in inventory. Depreciation: Calculated on straight-line 15-year depreciation of plant value. R&D Costs: R&D department expenditures for each product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions: The promotion budget for each product. Sales: The sales force budget for each product. Other: Charges not included in other categories such as Fees, Write Offs, and TQM. The fees include money paid to investment bankers and brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last year's current debt, including short term debt, long term notes that have become due, and emergency loans. Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing.

Other	$7,894	4.9%
EBIT	$13,493	8.4%
Short Term Interest	$3,107	1.9%
LongTerm Interest	$13,320	8.3%
Taxes	($1,027)	-0.6%
Profit Sharing	$0	0.0%
Net Profit	($1,907)	-1.2%

Annual Report