Thomas Inc. is considering three countries for the sole manufacturing site of its new product: India, China, and Canada. The product will be sold to retail outlets in Canada at $47.50 per unit. These retail outlets add their own markup when selling to final customers. The three countries differ in their fixed costs and variable costs per product.

Required
1. Compute the breakeven point of Thomas Inc. in both (a) units sold and (b) revenues for each of the three countries considered.
2. If Thomas Inc. sells 1,350,000 units in 2016, what is the budgeted operating income for each of the three countries considered?
3. What level of sales (in units) would be required to produce the same operating income in China and in Canada? What would be the operating income in India at that volume of sales?

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Annual Fixed Costs S 6.4 million 4.4 million 0.2 million Variable Manufacturing Costs per Unit $ 5.20 9.50 19.30 Variable Marketing and Distribution Costs per Unit $21.80 18.40 India China Canada 6.20