Endless Mountain Company manufactures a single product that is popular with outdoor recreation enthusiasts. The company sells its product to retailers throughout the northeastern quadrant of the United States. It is in the process of creating a master budget for 2022 and reports a balance sheet at December 31, 2021 as follows:

Endless Mountain Company manufactures a single product that is popular with outdoor recreation enthusiasts. The company sells its product to retailers throughout the northeastern quadrant of the United States. It is in the process of creating a master budget for 2022 and reports a balance sheet at December 31, 2021 as follows: Endless Mountain Company Balance Sheet December 31, 2021 Assets Current assets: Casn 3 46,233 Accounts receivable [net] 263,333 Raw materials inventory [4,533 yards] 11,253 Finisned goods inventory [1,533 units] 32:25? Total current assets 399,233 Plant and equipment: Buildings and equipment 933,333 Accumulated depreciation [292,333] Plant and equipment, net 633,333 Total assets $953,333 Liabilities and Stockholders\" Equity Current liabilities: Accounts payable $153,333 Stockholders' equity: Common stock 9 419,333 Retained earnings 379,933 Total stooknolders' equity 799;??? Total liabilities and stocknolders' equity $957,733 The company's chieffinancial ofcer {CFO}, in consultation with various managers across the organization has developed the following set of assumptions to help create the 2022 budget: 1. pm 5. The budgeted unit sales are 12,000 units, 37,000 units, 15,000 units, and 25,000 units for quarters 1-4, respectively. Notice that the company experiences peak sales in the second and fourth quarters. The budgeted selling price for the year is $32 per unit. The budgeted unit sales for the rst quarter of 2023 is 13,000 units. .All sales are on credit. Uncollectible accounts are negligible and can be ignored. Seventy-ve percent of all credit sales are collected in the quarter ofthe sale and 25% are collected in the subsequent quarter. . Each quarter's ending nished goods inventory should equal 15% ofthe next quarter's unit sales. . Each unit offinished goods requires 3.5 yards of raw material that costs $3.00 per yard. Each quarter's ending raw materials inventory should equal 10% ofthe next quarter's production needs. The estimated ending raw materials inventory on December 31, 2022 is 5,000 yards. . Seventy percent of each quarter's purchases are paid for in the quarter of purchase. The remaining 30% of each quarter's purchases are paid in the following quarter. Direct laborers are paid $18 an hour and each unit offinished goods requires 0.25 direct laborhours to complete. All direct labor costs are paid in the quarter incurred. 7'. The budgeted variable manufacturing overhead per direct laborhour is $3.00. The quarterly fixed manufacturing 8. overhead is $150,000 including $20,000 of depreciation on equipment. The number of direct labor-hours is used as the allocation base for the budgeted plantwide overhead rate. All overhead costs [excluding depreciation} are paid in the quarter incurred. The budgeted variable selling and administrative expense is $1.25 per unit sold. The xed selling and administrative expenses per quarter include advertising {$25,000}, executive salaries {$64,000}, insurance {$12,000}, property tax {$8,000}, and depreciation expense {$8,000}. All selling and administrative expenses (excluding depreciation} are paid in the quarter incurred. 9. "he company plans to maintain a minimum cash balance at the end of each quarter of $30 000. Assume that any borrowings take place on the rst day of the quarter. To the extent possible, the company will repay principal and '"Iterest on any borrowings on the last day of the fourth quarter. The company s lender imposes a simple interest rate of 3% per quarter on any borrowings. 10. Dividends of $15,000 will be declared and paid in each quarter. 11. "he company uses a lastin, first-out [LIFO] inventory ow assumption. This means that the most recently purchased raw materials are the \"rst-out\" to production and the most recently completed nished goods a re the \"rst-out\" to customers. Required: 1. Calculate the following budgeted gures for 2022: a. The total fixed cost. b. "he variable cost per unit sold. c. "he contribution margin per unit sold. d. "he break- even point in unit sales and dollar sales. e. The margin of safety. f. The degree of operating leverage 2. Prepare a budgeted variable costing income statement for 2022. Stop your computations at net operating income.