Cindy works for a small manufacturing company which makes only one product. The Christmas season accounts for 45% of annual sales. The product sells for $49 each. On January 2, the accounting department provided the management team with the following unit cost information based on Decembers results:

DM $10

DL 3

VOH 2

FOH 12

Total unit cost $27

Cindy was elated. We make a profit of $22 on every unit we sell. That means we have nothing to worry about. We are going to make lots of money no matter what.

Is Cindy correct? Explain your answer.