In Year 1, Jay Company expects to sell 2,243 units at $110 per unit. Sales are expected to increase 25% each year for years 2-4. The unit sales price will remain the same. Labor is 23% of sales, Overhead 10%, Materials 5%, and Variable Sales and Admin, 4%. Fixed Costs, are Factory Overhead (2%) and Sales and Admin (4%). Interest expense of $425 is evenly budgeted over the period. The company tax rate is 20%.

a) Create the Sales Budget for the 4-year period.

b) Calculate the variable cost per unit based on the cost given.

c) Create a budgeted income statement for the 4-year period, using all the information provided and calculated.

d) Calculate the CM ratio, Unit CM, Breakeven in units, Breakeven in dollars for the total 4-year period.

e) If sales remain at the budgeted 4-year level, but fixed costs increase to $367,800, and the company wants to achieve target net income of $ $700,000, recalculate the CM ratio, Unit CM, Breakeven in units, Breakeven in dollars, and Target Breakeven in Units.

a)		1	2	3	4	Total
	Expected Sales (units)	2,243	2,804	3,505	4,381	12,932					25% growth rate in sales
	Unite Sales Price	$110	$110	$110	$110
	Total Sales Revenue