Hammoud would like to start practicing a commercial activity and went to the bank to borrow, and he presented to the bank the expected income statement for the first year of his activity, which came as follows:

Sales revenue= 300000 $ The quantity of sales is 20,000 units Variable industrial costs = $ 100,000 Fixed manufacturing costs = $ 50,000 Variable selling expenses = $ 30,000 Fixed selling expenses = $ 30,000 Variable administrative expenses = $ 10,000 Fixed administrative expenses = $ 60,000 Net profit = $ 20,000

Required: 1- Required:If the data estimated by Hammoud is correct, specify the break-even point in units, value and margin ratio with the comment. To get the result, use the accounting rule:

-Unit Breakeven Point = Total Fixed Costs / Unit Contribution Margin

-Breakeven point in value = Breakeven point in units * Sale price -Break-even Point = Total Fixed Costs / Unit Contribution Margin Ratio -Margin of Safety by Quantity = Target Actual Sales Quantity - Breakeven Sales Quantity -Margin of Safety in Value = Target Actual Sales Value - Breakeven Sales Value

-Safety Margin Ratio = Margin of Safety / Actual Sales Target

-Margin of Safety in Value = Target Actual Sales Value (Target Sales * Sales Price) - Equivalent Sales Value -Margin of safety in value = Margin of safety in quantity * Sale price 2- Required: Preparing the income statement , taking into account that Reducing the level of sales by 20% from the planned level is more realistic. To get the result, use the accounting rule:

-Unit Breakeven Point = Total Fixed Costs / Unit Contribution Margin

-Breakeven point in value = Breakeven point in units * Sale price -Break-even Point = Total Fixed Costs / Unit Contribution Margin Ratio

3- Required: Finding the break-even point, taking into account If an amount of 6000 $ can be excluded from the fixed selling costs by wholesaling with the payment of commissions, the variable selling expenses will increase to 15% of the selling price To get the result, use the accounting rule:

-Unit Breakeven Point = Total Fixed Costs / Unit Contribution Margin

-Breakeven point in value = Breakeven point in units * Sale price -Break-even Point = Total Fixed Costs / Unit Contribution Margin Ratio

4- Required: Calculating the impact on the net profit, taking into account and with the assumption that the fixed and variable selling expenses are the original (estimated by Hammoud) Increasing the number of units sold by 50% can be achieved by reducing the unit selling price to 12 $ To get the result, use the accounting rule:

Break-even Sales Volume = Total Fixed Costs / (Sales Price per unit - Variable Unit Cost)