Mess Free Litter, Inc. (MFL) recently patented its new electronic and remote-controlled litter box. Research indicates that the scooping of the litter is the task most abhorred by cat owners. MFL's new product automatically "scoops" and fills the pan with fresh litter from the reservoir. MFL has budgeted 27,500 units for production and sales in the first year of operation. Practical capacity is 70,000 units. Variable manufacturing costs per unit are as follows: (Click the icon to view the company's cost data.) Fixed Manufacturing Overhead is $770,000 annually. Read the requirements. Requirements Data table Materials Labor $ 27.00 $ 38.00 Overhead $ 15.00 x Print Done uring cost wer to the nearest cent.) Mess Free Litter, Inc.'s selling price would be $ 162.00 1. Assume that MFL uses absorption costing and uses master-budget utilization as the denominator level for calculating its fixed manufacturing overhead rate. Selling price is set at 150% of total manufacturing cost. Compute MFL's selling price. 2. Due to a lagging economy, sales are not as robust as MFL anticipated. Adding to the pressure on sales, Mr. Fred Damons, President of MFL, believes the stream of newcomers to the market are (1) using his patent-protected technology and (2) pricing their products at a loss. No change is made to the pricing model and budgeted sales and production for 2021 is 19,250 units. You are the CFO at MFL. Explain to Mr. Damons what affect this revised forecast will have in 2021. 3. Recompute the selling price using practical capacity as the denominator level of activity. How would this choice have affected MFL's position in the marketplace? Generally, how would this choice affect the production-volume variance? Print Done Requirement 2. Due to a lagging economy, sales are not as robust as MFL anticipated. Adding to the pressure on sales, Mr. Fred Damons, President of MFL, believes the stream of newcomers to the market are (1) using his patent-protected technology and (2) pricing their products at a loss. No change is made to the pricing model and budgeted sales a xplain to Mr. Damons what affect this revised forecast will have in 2021. Begin by computing Mess Free Litter, Inc.'s new selling price. (Round your answer to the nearest cent.) Mess Free Litter, Inc.'s selling price would be $ 180.00 Comment on how Mess Free Litter, Inc.'s choice of budgeted production affected its selling price and competitive By using budgeted units produced, and not practical capacity as the denominator level, Mess Free Litter, Inc. is Mess Free Litter, Inc.'s higher selling price, its sales have declined. Consequently, 2021 budgeted quantities are causes Mess Free Litter, Inc. to continually burdening its products with the cost of unused capacity. costing its products at the lowest price possible. Apparently the competitor has not done this, and because of This phenomenon is known as and it