During the third year of operations, Memories, Inc. estimates that 415,000 figurines (385,000 dolls and 30,000 replicas) will be produced. Direct material costs per unit remain at $.74 per doll and $.62 per replica. Direct labor costs are $2.51 per doll and $2.78 per replica. Monthly fixed selling and administrative costs are $15,300 while monthly fixed manufacturing overhead is $2,851. The variable overhead cost is $.55 per figurine. Sales price for the replicas is $5.25 each and the sales price for the dolls is $5.00 each. Required: (For each independent question, refer to the original information above.)

A. Compute the break-even point in Year 3 for the figurines. How many dolls and how many replicas must be sold to break-even?

B. What options does MI have to reduce the break-even point? Discuss both the quantitative and qualitative factors that must be considered with each option.

C. How many dolls and replicas, respectively, would MI need to sell in Year 3 to earn a before-tax profit of $150,000?

D. If its tax rate is 30 percent, how many figurines does MI need to sell in Year 3 to earn an after-tax profit of $150,000?

E. How will the break-even point change if the sales mix changes to 80 percent dolls and 20 percent replicas?

F. What would happen to the break-even point if labor costs increased by 10 percent for each type of figurine?

G. What would happen to the break-even point if MI increased the sales price of replicas to $5.50 and dolls to $5.25?