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may I know where the two numbers underline coming from? Thank you! Sales price Fact Pattern: MultiFrame Company has the following revenue and cost budgets
may I know where the two numbers underline coming from? Thank you!
Sales price Fact Pattern: MultiFrame Company has the following revenue and cost budgets for the two products it sells: Plastic Glass Frames Frames $10.00 $15.00 Direct materials (2.00) (3.00) Direct labor (3.00) (5.00) Fixed overhead (3.00) (4.00) Net income per unit $ 2.00 $ 3.00 Budgeted unit sales 100,000 300,000 The budgeted unit sales equal the current unit demand, and total fixed overhead for the year is budgeted at $975,000. Assume that the company plans to maintain the same proportional mix. In numerical calculations, MultiFrame rounds to the nearest cent and unit. The total number of units needed to break even if the budgeted direct labor costs were $2 for plastic frames instead of $3 is A. 154,028 units 144,444 units B. Answer B is correct. If the labor costs for the plastic frames are reduced by $1, the composite unit contribution margin will be $27 {($10 - $2 $2) + [($15 $3 $5) * 3]}. Hence, the new breakeven point is 144,444 units [4 units * ($975,000 FC = $27)]. + O C. 146,177 units 156,000 units D
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