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Help Barnie, Inc. is a newly organized manufacturing business that plans to manufacture and sell 100,000 units per year of a new product. The following
Help Barnie, Inc. is a newly organized manufacturing business that plans to manufacture and sell 100,000 units per year of a new product. The following estimates have been made of the company's costs and expenses (other than income taxes): a. What should the company establish as the sales price per unit if it sets a target of earning an operating income of exist400,000 by producing and selling 100,000 units during the first year of operations? b. At the unit sales price computed in part a, how many units must the company produce and sell to break even? (Assume all units produced are sold.) c. What will be the margin of safety (in dollars) if the company produces and sells 100,000 units at the sales price computed in part a? Using the margin of safety, compute operating income at 100,000 units. d. Assume that the marketing manager thinks that the price of this product must be no higher than exist130 to ensure market penetration. Will the setting the sales price at exist130 enable Thermal Tent to break even, given the plans to manufacture and sell 150,000 units? Explain your
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