BALDWIN INCOME STATMENT WITH BUDDY IN IT BELOW

I've been reading our analysis of Baldwin, especially about their product called Buddy. The sales forecast for Buddy is 1279 units. From what I know of their CEO's typical approach, Baldwin will want to have at least an extra 10% of units above this forecast. Baldwin would rather have excess inventory carrying costs than lose possible sales due to stocking out. With current inventory levels in mind, what will the production after adjustment have to be in order to have a 10% reserve of units available to sell for Buddy? I look forward to your response - thank you. Linda Linda Lopez Board Member, Marketing | Andrews Corporation 1279 units 1407 units 1194 units 1322 units \begin{tabular}{|c|c|c|c|c|c|c|c|c|} \hline & Bam & Bit & Beetle & Bill & Buddy & Total & Industry Avg & Percentage \\ \hline Sales & $35,199 & $44,640 & $21,329 & $28,323 & $36,682 & $166,173 & $163,344 & 100% \\ \hline \multicolumn{9}{|l|}{ Variable Costs } \\ \hline Direct Material & $12,261 & $12,081 & $8,537 & $13,594 & $14,067 & $60,541 & $60,670 & 36.4% \\ \hline Direct Labor & $9,107 & $10,233 & $4,722 & $7,210 & $9,902 & $41,174 & $43,734 & 24.8% \\ \hline Inventory Carry & $139 & $0 & $267 & $185 & $214 & $804 & $1,312 & 0.5% \\ \hline Total Variable Costs (Labor, Material, Carry) & $21,507 & $22,314 & $13,526 & $20,989 & $24,183 & $102,519 & $105,716 & 61.7% \\ \hline Contribution Margin & $13,693 & $22,326 & $7,803 & $7,334 & $12,499 & $63,655 & $57,629 & 38.3% \\ \hline \multicolumn{9}{|l|}{ Period Costs } \\ \hline Depreciation & $2,117 & $4,097 & $1,192 & $1,712 & $1,763 & $10,882 & $11,380 & 6.5% \\ \hline \multicolumn{9}{|l|}{ SG\&A } \\ \hlineR&D & $680 & $0 & $643 & $731 & $787 & $2,841 & $2,944 & 1.7% \\ \hline Promotions & $1,217 & $1,217 & $1,217 & $1,217 & $1,217 & $6,086 & $6,909 & 3.7% \\ \hline Sales & $1,717 & $1,717 & $1,717 & $1,717 & $1,717 & $8,586 & $7,170 & 5.2% \\ \hline Administration & $263 & $334 & $160 & $212 & $274 & $1,243 & $1,338 & 0.7% \\ \hline Total Period Costs & $5,995 & $7,365 & $4,930 & $5,590 & $5,759 & $29,639 & $29,741 & 17.8% \\ \hline \multirow[t]{8}{*}{ Net Margin } & $7,698 & $14,960 & $2,874 & $1,744 & $6,740 & $34,016 & $27,887 & 20.5% \\ \hline & \multicolumn{5}{|c|}{ Other Expenses } & $7,021 & $5,885 & 4.2% \\ \hline & \multirow{2}{*}{\multicolumn{5}{|c|}{\begin{tabular}{r} EBIT \\ Short-Term Interest \end{tabular}}} & $26,994 & $22,002 & 16.2% \\ \hline & & & & & & $1,515 & $1,529 & 0.9% \\ \hline & \multicolumn{5}{|c|}{ Long-Term Interest } & $6,011 & $6,435 & 3.6% \\ \hline & \multicolumn{5}{|c|}{ Taxes \& Tariffs } & $6,814 & $4,913 & 4.1% \\ \hline & \multicolumn{5}{|c|}{ Profit Sharing } & $253 & $182 & 0.2% \\ \hline & \multicolumn{5}{|c|}{ Net Profit } & $12,401 & $8,942 & 7.5% \\ \hline \end{tabular}