Comfort Lid manufactures a line of woman's shoes that are sold in stores Australia wide. The financial controller Mr Caddy has just received the sales forecast for the coming year for the company's three main product lines: hiking boots, summer sandals and evening heels. The company has experienced considerable variation in sales volume and variable costs over the past two years and Mr Caddy believes the forecast should be carefully evaluated from a cost volume viewpoint. The preliminary budget information for 2011 follows: Hiking Summer Evening Boots Sandals Heels Unit sales 50,000 50,000 100,000 Unit selling price $84 $108 $144 Variable manufacturing cost per unit 39 36 75 Variable selling cost per unit 15 12 18 For 2011 the company's fixed selling and administrative expenses are forecasted to be $7,800,000. The company has a tax rate of 40% REQUIRED (@) Assuming the sales mix remains as budgeted, determine how many units of each product Comfort Ltd must sell in order to break even in 2011. (b) Calculate the company's budgeted net income for 2011 (C) If the company wishes to achieve a targeted pretax profit of $1,200,000 how many units overall would have to be sold? (d) After preparing the original estimates, the company received a letter from their overseas supplier advising them of a 20 percent increase in the leather they purchase to make their "evening heels" . Furthermore it was discovered that the variable selling cost of the "summer sandles" could be expected to increase by $4 per unit and the variable selling cost of the hiking boots are expected to decrease by $2 per unit. Under these circumstances, determine how many units of each product Comfort Lid would have to sell in order to breakeven in 2011. (ii) Discuss the impact of these adjustments to the company's break even point. (iii) Based on your calculations in part D, advise the financial controller Mr Caddy of THREE possible ways to reduce the break even point