Blaster Corporation manufactures hiking boots. For the coming year, the company has budgeted the following costs for the production and sale of 30,000 pairs of boots:

Instructions

a. Compute the sales price per unit that would result in a budgeted operating income of $900,000, assuming that the company produces and sells 30,000 pairs.

b. Assuming that the company decides to sell the boots at a unit price of $121 per pair, 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 pairs that must be produced and sold annually to break even at a sales price of $121 per pair.

Transcribed Image Text:

Percentage of Costs Budgeted Costs Budgeted Costs per Pair Considered Variable Direct materials $ 630,000 $21 100% Direct labor... 300,000 10 100 Manufacturing overhead (fixed and variable) Selling and administrative expenses 720,000 24 25 600,000 20 20 Totals $2,250,000 $75