3-31 CVP analysis, international cost structure differences. Braided Rugs, Inc., is considering three possible countries for the sole manufacturing site of its newest area rug: Italy, Portugal, and...

Extracted text: 3-31 CVP analysis, international cost structure differences. Braided Rugs, Inc., is considering three possible countries for the sole manufacturing site of its newest area rug: Italy, Portugal, and Thailand. All area rugs are to be sold to retail outlets in the United States for $250 per unit. These retail outlets add their own markup when selling to final customers. Fixed costs and variable cost per unit (area rug) differ in the three countries. Variable Variable Manufacturing Cost per Area Rug Marketing & Distribution Cost Annual Sales Price Fixed to Retail Costs Outlets Country Portugal Italy per Area Rug $7,500,000 $45.00 $250.00 $10.00 5,000,000 65.00 250.00 15.00 9,000,000 55.00 250.00 Thailand 20.00 1. Compute the breakeven point for Braided Rugs, Inc., in each country in (a) units sold and (b) revenues. 2. If Braided Rugs, Inc., plans to produce and sell 80,000 rugs in 2017, what is the budgeted operating income for each of the three manufacturing locations? Comment on the results.