Calculate the break-even point in units (calculate the number of units of each product required), and the number of units of both products that must be sold to earn an operating income of $200,000. Use 2023 budgeted information refer to section D bullet point 2 and your results from requirement 5.

A. Budget information assembled at the start of 2022
	Plain Chair	Customized Chair
Budgeted production	50,000	10,000
Number of chairs per batch	50	8
Setup labor hours per batch	2.5	5
Budgeted feet of lumber per chair	18	25
Budgeted direct manufacturing labor	100,000	60,000
Budgeted machine hours	60,000	40,000
Budgeted Manufacturing Operations Overhead Costs
Variable costs
Supplies	$40,000
Indirect manuf. Labor	95,000
Power	135,000
Maintenance	125,000	$395,000
Fixed costs
Depreciation	100,000
Supervision and Designer Salaries	75,000
Power	20,000
Maintenance	30,000	225,000
		$620,000	Total
Budgeted Machine Setup Overhead Costs
Variable costs
Supplies	$85,000
Indirect manuf. Labor	185,000
Power	155,000
Inspection Costs	50,000	$475,000
Fixed costs
Depreciation	65,000
Supervision	80,000
Power	50,000
Engineering Costs	30,000	225,000
		$700,000	Total
B. Actual information for 2022 that can be traced directly to each product:
	Plain Chair	Customized Chair
Direct material cost (DM Used)	$810,000	$550,000
Feet of lumber per chair	18	25
Lumber in inventory (12/31/202)	60,000	25,000
Direct labor cost	$1,800,000	$1,344,000
Direct labor hours	100,000	64,000
Direct labor hours per chair	2	6.4
Number of chairs per batch	50	8
Machine hours	62,500	42,000
Number of batches	1000	1250
Setup labor hours per batch	2.5	5.2
Setup labor hours	2,500	6,500
Total sales commissions	$192,000	$80,000
Units produced	50,000	10,000
Units sold	48,000	10,000
Chairs in inventory (1/1/2022)	6,000 @ $57.50 each	0
Sales revenue	$3,840,000	$2,850,000
C. Additionally, the T-shirt division had the following actual costs by month in 2022 that were not directly traced to either product:
Actual Manufacturing Overhead Costs - 2022
	Manufacturing Operations	Machine Setups	Alternative Cost Driver
Month	Machine-Hours	Cost	Setup-Hours	Cost	Direct Labor Hours
Jan	7,364	44,994	1048	69,923	12,100
Feb	7,253	44,512	907	73,087	12,700
Mar	8,906	54,900	946	79,423	13,100
Apr	7,853	51,543	716	47,265	12,200
May	10,832	59,900	513	47,158	14,070
Jun	9,372	54,477	552	53,982	14,600
Jul	8,463	53,221	528	35,113	14,000
Aug	7,903	46,611	598	41,789	13,400
Sep	9,542	53,778	723	64,864	14,200
Oct	8,423	53,033	720	65,023	15,200
Nov	9,484	56,321	914	60,321	14,400
Dec	9,105	52,453	835	73,853	14,030
Total	104,500	625,743	9,000	711,801	164,000
Actual Annual Period Costs 2022
Advertising expense	$300,000
Sales department salaries	350,000
Selling and administration depreciation	80,000
D. Based on the information you have gathered you also make the following assumptions:
	Because of past financial trouble in the division, all expenses must be paid in cash. No sales are made on account (all sales are cash sales).
	Information for the 2023 budget is as follows:
o	The budgeted unit input quantities for materials, labor, and MOH (machine hours and setup labor hours) used in 2022 will also be used in the 2023 budget, excpet for budgeted DLHr/unit for the custom chair, which is revised up to 6.2 DLHrs/chair
o	The cost of poplar is budgeted to increase by 8% in 2023 over 2022 actual costs. Red Oak is budgeted to increase by 10% in 2023 over 2022 actual costs.
o	Budgeted labor rates in 2023 are expected to be the same as actual rates in 2022
o	Calculate 2023 budgeted variable moh rates and total fixed moh from 2022 actual monthly cost and activity data. Use Regression Analysis to determine estimates for variable and monthly fixed costs. Convert monthly estimates of fixed costs into annual costs.
o	Assume non-cash MOH item amounts remain unchanged from budgeted 2022 data.
o	Production and sales forecasts are within the relevant range.
o	Budgeted variable period costs per unit and fixed costs in total for 2023 are assumed to be the same as actual period costs in 2022.
o	A 2% increase in selling price for 2023 is expected for the plain model and a 3% increase is expected for the customized model
	Normal costing is used.
	There are two cost drivers for manufacturing overhead costs machine-hours and setup labor-hours.
	Machine-hours is the cost driver for the variable portion of manufacturing operations overhead. Machine-hours is also used to allocate the fixed portion of manufacturing operations overhead.
	Setup labor-hours is the cost driver for the variable portion of machine setup overhead. Setup labor-hours is also used to allocate the fixed portion of machine setup overhead.
	Projected sales for the plain chair are 51,250 in 2023, 54,000 in 2023 and 58,000 in 2025
	Projected sales for the customized chair are 10,250 in 2023, 12,000 in 2024, and 14,000 in 2025.
	Sales commission is paid as a rate per chair sold.
	2023 input cost and quantity standards for direct materials, direct manufacturing labor and manufacturing overhead are the same as 2023 budgeted input costs and quantities.
	You require an ending inventory of plain chairs of 10% of next years total sales needs. Customized chairs are made to order and no inventory of finished goods is planned.
	You require an ending raw material inventory of 8% of next years production needs (for both product lines).
	Assume a FIFO cost flow
	Assume no WIP inventory.
	Your beginning cash balance is $200,000 for 2023. The company requires a minimum cash balance of $150,000.