PA13. LO 74 Caribbean Hammocks currently sells 75,000 units at $50 per unit. Its expenses are: $ 9 10 Direct materials per unit Direct labor per unit Variable manufacturing overhead per unit Variable sales and administration expenses per unit Fixed manufacturing overhead Fixed sales and administration expenses Taxes 75.000 850,000 30% * of income before taxes Management believes it can increase sales by 5,000 units for every $5 decrease in sales price. It also believes the additional sales will allow a decrease in direct material of $1 for each additional 5,000 units. Prepare a flexible budgeted income statement for 75,000- 80,000-, and 85,000-unit sales. PA14. LO 74 Total Pop's data show the following information: Estimated sales (units) Sales price per unit Direct labor per unit Labor rate per hour Jan Feb Mar Apr May 15,000 14,500 16,000 15,500 15,800 $ 45 $ 45 $ 45 $ 45 $ 45 $ 35 35 225 5 2 5 2 5 18 $ 18 $ 21 $ 215 21 New machinery will be added in April. This machine will reduce the labor required per unit and increase the labor rate for those employees qualified to operate the machinery. Finished goods inventory is required to be 20% of the next month's requirements. Direct material requires 2 pounds per unit at a cost of $3 per pound. The ending inventory required for direct materials is 15% of the next month's needs. In January, the beginning inventory is 3,000 units of finished goods and 4,470 pounds of material Prepare a production budget, direct materials budget, and direct labor budget for the first quarter of the year