CVP analysis, international cost structure differences. Braided Rugs, Inc., is considering three possible countries for the sole manufacturing site of its newest area rug: Italy, Portugal, and Thailand. All area rugs are to be sold to retail outlets in the United States for $250 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.

#2 Income Statements
Sales
Variable Costs
Contribution Margin
Fixed Costs
Net Income
Where should the company make the rugs? Explain your results with amounts from your income statements.

Country Portugal Sales Price to Retail Outlets $250.00 250.00 250.00 Annual Fixed Costs $7,500,000 5,000,000 9,000,000 Variable Manufacturing Cost per Area Rug $45.00 65.00 55.00 Variable Marketing & Distribution Cost per Area Rug $10.00 15.00 20.00 Italy Thailand Country Portugal Sales Price to Retail Outlets $250.00 250.00 250.00 Annual Fixed Costs $7,500,000 5,000,000 9,000,000 Variable Manufacturing Cost per Area Rug $45.00 65.00 55.00 Variable Marketing & Distribution Cost per Area Rug $10.00 15.00 20.00 Italy Thailand