In October 2014, Saldanha Sports Company sold soccer balls to its distributors for $18 each. The sales

level of 40,000 soccer balls was less than the single shift capacity of 50,000 soccer balls at their plant in

Granville, South Carolina. These are the costs for October 1996:

Direct Labor costs $ 2 per ball Direct Material Costs 4 per ball Variable manufacturing 3 per ball support costs

Fixed manufacturing 122,000 per month support costs

Variable selling and 2 per ball administrative costs

Fixed selling and 52,200 per month administrative costs (a) Compute the contribution margin per soccer ball in October 1996.

(b) Compute the gross margin per soccer ball in October 1996.

(c) Compute the sales level in number of soccer balls at which the profit on sales is 10%. The marketing manager has decided to reduce the price to $16.75 per soccer ball for November 1996

and increase the monthly advertising budget by $17,725. The expectation is that these actions will

increase sales to 63,000 soccer balls. If sales in exceed 50,000 soccer balls, the plant will need to operate

two shifts and the fixed manufacturing costs will increase to $232,400. (d) Compute the two breakeven points for November 1996: (i) operating one shift; (ii) operating two

shifts.

(e) Compute the sales level in number of soccer balls at which the profit under the new marketing

plan, is $32,775. Is there more than one possible sales level at which the profit is $32,775?