Preparing a Profit Equation to Predict Future Profits Picnic Time produces a picnic basket that is sold for $$100$ per unit. Assume the company produced and sold $4,000$ baskets during July. There were no beginning or ending inventories. Variable and $$xed costs follow. Variable Cost per Unit Fixed Costs per Month Manufacturing: Direct materials $...............$ $$25$ Direct labor $..................15$ Manufacturing overhead $........5$ $$45$ Selling and administrative......... $4$ Total $.........................$ $$49$ Manufacturing overhead $........$ $ $36,000$ Selling and administrative....... $68,000$ Total $.......................$ $$104,000$ REQUIRED a$.$ Prepare a monthly profit equation. b$.$ Determine profit for the month of July using the equation from part a$.$ LO$15-5$ MBC H o m w o r k e Coffee Bean LO$15-6$ MBC H o m w o r k e Dart Container Corp. LO$15-1$ MBC H o m w o r k e Picnic Time $15-29$ Chapter $15$ Cost$-$Volume$-$Profit Analysis and Planning $$ Cambridge Business Publishers

c$.$ For August, the company estimates that sales will range between $4,100$ on the low$-$end and $4,400$ on the high$-$end. What is the range of predicted profits? E$15-23.$ Contribution Income Statement, Graph, and Analysis Use the information from E$15-22$ to answer the following questions. REQUIRED a$.$ Prepare a contribution income statement for July. b$.$ Prepare a cost$-$volume$-$profit graph. Label the horizontal axis in units with a maximum value of $8,000.$ Label the vertical axis in dollars with a maximum value of $$1,000,000.$ Draw a vertical line on the graph for the current $(4,000)$ unit sales level, and label total variable costs, total fixed costs, and total profits at $4,000$ units. c$.$ Determine the break$-$even point in sales dollars. d$.$ Suppose the cost of labor is expected to increase next year. How will this affect the break$-$even point? e$.$ Determine July$$s margin of safety in sales dollars. f$.$ What dollar sales volume is currently required to obtain a before$-$tax profit of $$120,000?$