Coconut Plantations Pty Ltd management plans to introduce detergents to their product range in 2018. They have provided the following information relating to their planned activities.

Required
a. Calculate the break-even point in total units and units per product based on the 2018 data.
b. Calculate the before tax profit (loss) that would be achieved in 2018 based on the above data.
c. Management is concerned about increasing competition for some of its products, and wants to increase its sales of Soaps relative to Detergents. The initiative would increase annual fixed costs by $50,000 and alter the sales mix to 30 percent for Candles, 30 percent for Soaps and 40 percent for Detergents. On the available data, would you recommend the initiative?

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Sales mix (250 000 units) Selling price Variable cost/unit Total fixed costs = $402 800 Candles 75000 $28 18 Soaps 50 000 $45 27 Detergents 125 000 $20 12