Lorraines Widget Company is a wholesale distributor of widgets. Due to expected increases in the cost of inputs, the company is revising its plans for the coming year. The following represents current data used to formulate the original plans:

Selling price per unit $5.25

Number of units sold last year 400,000

Direct materials, per unit $1.50

Direct labor, per unit $1.00

Overhead, per unit $0.75

Selling and Administrative, variable per unit $1.00

Selling Costs $150,000

Administrative expenses $100,000

Based on the original data,

a. What is the contribution margin per unit?

b. What is the breakeven point in units?

c. What are total Selling and Administrative costs?

Assume that Lorraines Company requires a ROI equal to $50,000 per year.

d. What is the breakeven point in units?

e. What is net income at the breakeven point in d.

Assume management anticipates a 15% increase in product costs during the coming period.

After considering the increase in inputs and assuming the required ROI is still $50,000:

f. What is the contribution margin?

g. What the breakeven point in units?

h. What are the total Selling and Administrative costs?

i. Using the original data, what is net income if one unit more than the units required for breakeven are sold?

j. Using the original data, what is the breakeven point if sales decrease from 400,000 units per year to 350,000 units per year?

k. Based on the original data, what is net income?