Management accounting

Doyle's Candy Company is a wholesale distributor of candy. The company services gro- ceries, convenience stores, and drugstores in a large metropolitan area. Small but steady growth in sales has been achieved over the past few years while candy prices have been in- creasing. The company is formulating its plans for the coming fiscal year. Presented below are the data used to project the current year's after-tax net income of $264,960. Average selling price $9.60 per box Average variable costs: Candy production $4.80 per box Selling expense .96 per box Total $5.76 per box Annual fixed costs: Selling $ 384,000 Administrative 672,000 Total $1,056,000 Expected annual sales volume 390,000 boxes Tax rate 40% Manufacturers of candy have announced that they will increase prices of their products an average 15 percent in the coming year due to increases in raw materials (sugar, cocoa, peanuts, etc.) and labor costs. Doyle's Candy Company expects that all other costs will re- main at the same rates or levels as the current year. Required: a. What is Doyle's Candy Company's break-even point in boxes of candy for the cur- rent year? b. What selling price per box must Doyle's Candy Company charge to cover the 15 percent increase in variable production costs of candy and still maintain the cur- rent contribution margin percentage? c. What volume of sales in dollars must Doyle's Candy Company achieve in the com- ing year to maintain the same net income after taxes as projected for the current year if the selling price of candy remains at $9.60 per box and the variable produc- tion costs of candy increase 15 percent