CVP Analysis - Playworld Ltd
								Fixed				Variable
Production costs
	Direct materials											$3.00
	Direct labour											$3.50
	Factory Overhead							$150,000				$1.50
Selling Expenses
	Sales salaries and commissions						$62,000				$2.50
	Advertising							$53,200
	Miscellaneous selling							$8,900
General Expenses
	Office salaries							$9,600
	Supplies							$27,000				$2.50
	Miscellaneous general							$22,600

Additional information:

• The selling prices is $19 per unit.
• Income tax rate is 30%.
• It is budgeted that the company is going to sell 100,000 units in the coming year.

Required:

1. Calculate the following (please show calculations/workings).

1. The contribution margin ratio.
2. The breakeven point in units and in dollar amount.
3. The number of units to be sold for the company to make a before-tax profit of $10,000.
4. The revenue to be generated for the company to make an after-tax profit of $10,000.
5. The net profit based on budgeted sales of 100,000 units in the coming year.
6. The safety margin (in dollar amount) based on the budgeted sales of 100,000 units.