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Variable Sales Price Annual Variable Marketing and to Retail Fixed Manufacturing Cost Distribution Cost Country Outlets Costs per Area Rug per Area Rug France $280.00

Variable

Sales Price

Annual

Variable

Marketing and

to Retail

Fixed

Manufacturing Cost

Distribution Cost

Country

Outlets

Costs

per Area Rug

per Area Rug

France

$280.00

$9,394,000

$70.00

$56.00

Singapore

280.00

5,775,000

65.00

47.00

Italy

280.00

22,050,000

70.00

63.00

image text in transcribed

The Rug Shop, Inc., is considering three possible countries for the sole manufacturing site of its newest area rug: France, Singapore, and Italy. All area rugs are to be sold to retail outlets in the United States for $280 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 2.I The Rug Shop, Inc., plans to produce and sell 80,000 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) Another way to solve for the operating income or loss is: -Operating ncome (oss) )- Compute the budgeted operating income or loss for The Rug Shop, Inc., in each country if the company produces and sells 80,000 area rugs in 2014. (Use parentheses or a minus sign when entering operating losses.)

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