Exercise 1 (20 points) APPLICATION (SHOW ALL CALCULATIONS) Given the following: Income Statement (End of Year, 2019) 500,000 Industry% of sales 100 12 40 60,000 Net Sales Less: Inventory (B) Gross Purchases 200,000 Less: discounts 20,000 Net Purchases Total Goods Available Less: Inventory (E) Total Cost of Goods Sold Gross Margin: Less: Variable Expenses Sales Commissions 130,000 Deliveries 5,000 180,000 240,000 75.000 36 48 10 38 62 165,000 335,000 26 1 27 35 135.000 200,000 Contribution Margin Less: Fixed Expenses Rent Salaries Distribution Rights 50,000 95,000 5.000 10 12 1 23 12 150.000 50,000 Net Profit (BT) a. If there is a/are performance problem(s), what is/are the major source(s) of the discrepancy(ies) between the industry's marketing performance and that of your employer? Show your calculations and explain your answer (be specific). Remember you are looking at operational items, not summary data. b. Calculate the firm's 2019 Breakeven Sales figure. What is the new Breakeven Sales figure if the firm's management wants to increase next year's profit margin by 5% of Total Sales? (hint: the 5% increase in sales becomes a target profit), 2