R. A. Ro and Company, a manufacturer of qualitvhandmade walnut bowls, has had a steady growth in sales for the past five years. However, increased competitionhas led Mr. Ro, the president, to believe that an aggressive marketing campaign will be necessarynext year to maintain the company's present growth. To prepare for next year's marketing campaign, thecompany's controller has prepared and presented Mr. Ro with the following data for the current year, 2020:

R. A. Ro and Company, a manufacturer of qualityhandmade walnut bowls, has had a steady growth in sales for the past five years. However, increased competitionhas led Mr. Ro, the president, to believe that an aggressive marketing campaign will be necessarynext year to maintain the companys present growth. To prepare for next years marketing campaign, thecompanys controller has prepared and presented Mr. Ro with the following data for the current year, 2020:

Variable cost (per bowl)

Direct materials $ 3.25

Direct manufacturing labor 8.00

Variable overhead (manufacturing, marketing, distribution, and customer service) 2.50

Total variable cost per bowl $13.75

Fixed costs

Manufacturing $ 25,000

Marketing, distribution, and customer service 110,000 110,000

Total fixed costs $135,000

Selling price 25.00

Expected sales, 20,000 units $500,000

Income tax rate 40%

R. A. Ro and Company, a manufacturer of qualityhandmade walnut bowls, has had a steady growth in sales for the past five years. However, increased competitionhas led Mr. Ro, the president, to believe that an aggressive marketing campaign will be necessarynext year to maintain the company's present growth. To prepare for next year's marketing campaign, thecompany's controller has prepared and presented Mr. Ro with the following data for the current year, 2020: S 3.25 8.00 2.50 $13.75 Variable cost (per bowl) Direct materials Direct manufacturing labor Variable overhead (manufacturing, marketing, distribution, and customer service) Total variable cost per bowl Fixed costs Manufacturing Marketing, distribution, and customer service 110,000 Total fixed costs Selling price Expected sales, 20,000 units Income tax rate $ 25,000 110,000 $135,000 25.00 $500,000 40% R. A. Ro and Company, a manufacturer of qualityhandmade walnut bowls, has had a steady growth in sales for the past five years. However, increased competitionhas led Mr. Ro, the president, to believe that an aggressive marketing campaign will be necessarynext year to maintain the company's present growth. To prepare for next year's marketing campaign, thecompany's controller has prepared and presented Mr. Ro with the following data for the current year, 2020: S 3.25 8.00 2.50 $13.75 Variable cost (per bowl) Direct materials Direct manufacturing labor Variable overhead (manufacturing, marketing, distribution, and customer service) Total variable cost per bowl Fixed costs Manufacturing Marketing, distribution, and customer service 110,000 Total fixed costs Selling price Expected sales, 20,000 units Income tax rate $ 25,000 110,000 $135,000 25.00 $500,000 40%