Question: Please take your time and give me a proper answer you have almost 10 hours Question 4 (30 marks) Manuj Corporation has collected the following

Question 4 (30 marks) Manuj Corporation has collected the following information after year sales. S Amount Unit Net Sales $2,000,000 100,000 Selling Expenses (30% VC* & 70% FC**). 400,000 Direct Material 600,000 Direct Labour 340,000 Administrative Expenses (30% VC & 70% FC) 500,000 Manufacturing Overhead (30% VC & 70% FC). 480,000 Top managers have asked you to do Cost-Volume-Profit analysis so that they can make plans for the coming year. They have projected that unit sales will increase by 20% next year. *VC=Variable Cost **FC Fixed Costs Instructions: a) Calculate (1) the contribution margin for the current year and projected year, and (2) the fixed costs for the current year. (Assume that fixed costs will remain the same in the projected year) b) Calculate the break-even point in units and sales dollars. c) The company has a target operating income of $374,000. calculate the required sales amount in dollars for the company to meet its target. d) Assume the company meets its target operating income number. Calculate by what percentage its sales could fall before it operates at a loss. That is, what is its margin of safety ratio? e) The company is considering a purchase of equipment that would reduce its direct labour costs by $140,000 and would change its manufacturing overhead costs to 10% variable and 90% fixed costs. (Assume the total selling expense is $400,000, as above.) calculate (1) the contribution margin and (2) the contribution margin ratio, and (3) recalculate the break-even point in sales dollars. Comment on the effect each of management's proposed changes has on the break-even point
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