PROBLEM 20.2B Estimating costs and Profits O LO20-1, 1020-4, LO20-5 Snug-As-A-Bug manufactures sleeping bags. For the coming year, the company has budgeted the following costs for the production and sale of 80,000 units. Budgeted Costs Percentage of Costs Considered Variable Budgeted Costs per Unit Direct materials Direct labor Manufacturing overhead (fixed and variable) Selling and administrative expenses Totals $ 1,440,000 160,000 2,400,000 800,000 $4,800,000 $18 2 30 10 $60 100% 100 10 40 Instructions a. Compute the sales price per unit that would result in a budgeted operating income of $560,000, assuming that the company produces and sells 80,000 bags. (Hint: First compute the budgeted sales revenue needed to produce this operating income.) b. Assuming that the company decides to sell the sleeping bags at a unit price of $71 per unit, compute the following: 1. Total fixed costs budgeted for the year. 2. Variable cost per unit. 3. The unit contribution margin. 4. The number of bags that must be produced and sold annually to break even at a sales price of $71 per unit