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: BudgetedCosts BudgetedCostsper Pair Percentageof CostsConsideredVariableInstructionsa. 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. (Hint: First compute the budgeted sales revenue needed to produce this operating income.)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 costs 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.a. Sales price per unit: Budgeted costs $ Add: Budgeted operating income Budgeted sales revenue $ Sales price per unit $ b. (1) Total fixed costs: Manufacturing overhead $ 540,000 Selling and administrative expenses Total fixed costs $ (2) Variable costs and expenses per unit: Direct materials $ Direct labor Manufacturing overhead Selling and administrative expenses Total variable costs per unit $ (3) Unit contribution margin: Sales price per unit $ Less: Variable costs per unit [from (2)] Unit contribution margin $ (4) Number of units required to break even: Fixed costs [from (1)] $ Contribution margin per unit [from (3)] $ Number of units required to break even
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