Marchmen Corp has forecasted next year's activity as total sales of $450,000 on 3,000 units with a contribution margin ratio of 40% and fixed costs of $110,000. a. What is the forecasted break-even units: b. Management is considering using a new component that would increase the variable cost per unit by $2.00. Since the new component would increase the features of the company's product the sales rep predicts that they can raise the price by the same $2.00 and sales would increase by 500 units. What should the overall affect on the company's net operating income be by this change? c. Starting from the base case, the marketing vice president will be replacing $10,000 of the sales dept salaries with a sales commission of $6 per unit sold. The vice president believes this new structure will increase sales by 100 units above their original forecast. d. The company MUST SELL all of the 5,000 units left in inventory. What is the minimum sales price they can charge and still break even? Assume price and cost structure from the base case. Variance Analysis Example GO DAWGS make a product and has the following standards for their job costing Direct Materials (lbs) Direct Labor (hrs) Variable Overhead Costs Sind lbs Stnd or hrs Price/Rate needed per Unit of 3.0 S 4.00 2.0 S 21.00 2.0 $ 3.50 In June, the company produced 8,500 units using 36,125 pounds at a total direct material cost of $126,437.50 and required 12,750 direct labor hours to complete the order. The actual direct labor rate was $22.00 per hour and the total actual variable overhead costs were $43,350. Variable overhead is applied on the basis of direct labor hours. Determine the following: a. Total Production Cost variance b. Materials Quantity Variance c. Materials Price Variance d. Labor Efficiency Variance e. Labor Rate Variance f. Overhead Efficiency Variance & Overhead Pote 10