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Below A-E Questions, the bottom is the cost chart.

In October 2014, Saldanha Sports Company sold soccer balls to its distributors for $18 each. The sales level of 40,000 soccer balls was less than the single shift capacity of 50,000 soccer balls at their plant in Granville, South Carolina.

REQUIRED

(a) Compute the contribution margin per soccer ball in October 1996.

(b) Compute the gross margin per soccer ball in October 1996.

(c) Compute the sales level in number of soccer balls at which the profit on sales is 10%.

The marketing manager has decided to reduce the price to $16.75 per soccer ball for November 1996 and increase the monthly advertising budget by $17,725. The expectation is that these actions will increase sales to 63,000 soccer balls. If sales in exceed 50,000 soccer balls, the plant will need to operate two shifts and the fixed manufacturing costs will increase to $232,400.

(d) Compute the two breakeven points for November 1996: (i) operating one shift; (ii) operating two shifts.

(e) Compute the sales level in number of soccer balls at which the profit under the new marketing plan, is $32,775. Is there more than one possible sales level at which the profit is $32,775?

These are the costs for October 1996:

Direct Labor costs $ 2 per ball

Direct Material Costs 4 per ball

Variable manufacturing 3 per ball

support costs

Fixed manufacturing 122,000 per month

support costs

Variable selling and 2 per ball

administrative costs

Fixed selling and 52,200 per month

administrative costs

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