Please answer point 3 and 4 Stepla)The amount of revenue at which a companymakes a profit of zero is known as break-even sales. This sales number encompassesall of a business's fixed expenses as well asany variable expenses related to sales.Step2b)Computation:A1 ParticularsAmount=27000/(140-60)=((140-60) *8000)-270004 Sales volume that can be increased to increase profits (27000+(B3*125%))/(140-60)2 Break-even size3 ProfitResult:В1 ParticularsAmount2 Break-even size337.53 Profit4 Sales volume that can be increased to increase profits6130009916 Your company has reviewed its newproduct that it introduced last year, andit has been found that the annual salesItamounts to (8,000) units, the unit sellingprice is (140) dinars, and annual fixed costsare (27,000)dinars and the variable cost ofthe unit (60) dinars. You are asked to answerthe following, using an analysisTie level atit:1- What is the current break-even size,calculate it algebraically and graphically.2- Calculate the profit under the currentsales volume.3- To what extent can the salesvolume be increased if the company wantsto achieve net profits that increase?(25%)of the profit achieved under the currentprevailing situation, that is, in light of thecurrent sales volume?4- To what extentcan fixed costs be reduced, if the companywants to achieve net profits that increase?(20) percent of the profit achieved underthe current prevailing situation, that is, inlight of the current sales volume?

You have asked specifically to compute the answers for point 3 and 4 , the solutions of which are…

sales volume.3- To what extent can the sales volume be increased if the company wants to achieve net profits that increase?(25%) of the profit achieved under the current prevailing situation, that is, in light of the current sales volume?4- To what extent can fixed costs be reduced, if the company wants to achieve net profits that increase? (20) percent of the profit achieved under the current prevailing situation, that is, in light of the current sales volume?

sales volume.3- To what extent can the sales volume be increased if the company wants to achieve net profits that increase?(25%) of the profit achieved under the current prevailing situation, that is, in light of the current sales volume?4- To what extent can fixed costs be reduced, if the company wants to achieve net profits that increase? (20) percent of the profit achieved under the current prevailing situation, that is, in light of the current sales volume?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 87PSB

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