Preparing a Profit Equation to Predict Future Profits

Picnic Time produces a picnic basket that is sold for $$120$ per unit. Assume the company produced and sold $4,000$ baskets during July. There were no beginning or ending inventories. Variable and fixed costs follow.

Variable Cost per Unit Fixed Costs per Month

Manufacturing: Manufacturing overhead $$36,000$

Direct materials $$30$ Selling and administrative $78,000$

Direct labor $20$ Total $$114,000$

Manufacturing overhead $10$ $$60$

Selling and administrative $4$

Total $$64$

REQUIRED

a$.$ Prepare a monthly profit equation.

Profits $=$ $Answer

X $-($ $Answer

$+$ $Answer

X $)$

where X $=$ number of picnic baskets

b$.$ Determine profit for the month of July using the equation from part a$.$

Profits $=$ $Answer

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?

Profit range between $Answer

on the low end and $Answer

on the high end.