Discount Rugs, Inc., is considering three possible countries for the sole manufacturing site of its newest area rug: France, Brazil, and the United States. All area rugs are to be sold to retail outlets in the United States for $300 per unit. These retail outlets add their own markup when selling to final customers. Fixed costs and variable cost per unit (area rug) differ in the three countries. (Click the icon to view the cost data.) Read the requirements. Requirement 1. Compute the breakeven point for Discount Rugs, Inc., in each country in (a) units sold and (b) revenues. Determine the formulas for the breakeven point in units and the breakeven point in revenues. Begin with the breakeven point in units, then the breakeven point in revenues. Breakeven point in units %D Breakeven point in revenues %D Compute the breakeven point for Discount Rugs, Inc., in each country in (a) units sold and (b) revenues using the formulas you determined above. Brazil the United States France (a) Breakeven point in units Breakeven point in revenues (b) Requirement 2. If Discount Rugs, Inc., plans to produce and sell 90,000 rugs in 2014, what is the budgeted operating income for each of the three manufacturing locations? Comment on the results. Determine the formula to calculate the operating income or loss. Operating income (loss) %D Another way to solve for the operating income or loss is: = Operating income (loss) ) - Compute the budgeted operating income or loss for Discount Rugs, Inc., in each country if the company produces and sells 90,000 area rugs in 2014. (Use parentheses or a minus sign when entering operating losses.) France Brazil the United States Budgeted operating income variable cost per unit. Therefore, at any given selling price has the lowest breakeven points since it has the fixed costs and the will always have the highest operating income. is budgeted. The U.S.'s breakeven point is than the budgeted sales in 2014, therefore an Variable Sales Price Annual Variable Marketing and Fixed Manufacturing Cost Distribution Cost to Retail Country Outlets Costs per Area Rug per Area Rug 100.00 $ 300.00 $ 7,200,000 $ France 80.00 5,265,000 Brazil 300.00 95.00 70.00 the United States 120.00 300.00 14,595,000 75.00