1. The following information relates to a fertiliser business for 2015: Volume of product sold 100,000 tonnes Selling price 125 per tonne Average net profit 10 per tonne Contribution margin 30 per tonne Current plant capacity (2015) 125,000 tonnes In 2016 the company plans to increase its profit and sales substantially, but in order to do so it will have to reduce its selling price by 4%. The variable cost per unit will not change. However, if the company wishes to increase production above its current plant capacity levels, it will require additional machinery which will increase the overall fixed costs by 250,000 and will bring the plant capacity to an estimated 160,000 tonnes. Assuming the company decides to proceed with its plan to reduce its selling prices in 2016, but not install the new machinery, calculate the following: i. The sales volume and value required to give the same profit in 2016 as was achieved in 2015; and ii. The increase in profit that the company could achieve in 2016 by increasing sales to its existing full capacity of 125,000 tonnes. Assuming the company decides to proceed with the installation of the new machinery,calculate the following: iii. The break-even sales volume in 2016; and iv. The sales volume and value required to achieve a profit in 2016 that is 25% higher than the profit achieved in 2015.