10 CVP and analysis of changes porting calculations. se the Raindrops Lid of Hamilton manufactures garden sprinklers for home gardeners. The company sold 15,000 sprinklers last year at a price of $30 each. Last year's total costs of manufacture amounted to: Direct costs: Direct labour 150,000 Direct material 120,000 Indirect costs: Variable overhead 30,000 Fixed overhead 75,000 Total costs 375,000 In an attempt to improve the product and make it suited to professional gardeners, the company is considering for next year replacing a material component part that has a cost of $5 with a superior part costing $10. A new machine for manufacturing additional units would also be required to boost capacity. The machine would cost $20,000, have a useful life of four years and no salvage value. This move would therefore increase fixed overhead costs by $5,000 a year.Required a What was Raindrops Ltd's break-even point in numbers of units and dollar sales last year? b What would be the margin of safety percentage at sales of 15,000 sprinklers? c How many sprinklers would the company have had to sell in the last year to earn an operating profit of $90,000? d If Raindrops Ltd holds the sales price constant and makes the improvements suggested, how many sprinklers must be sold in the coming year for the company to break-even? e If the company holds the sales price constant and makes the suggested improvements, how many sprinklers would the company have to sell to make the same net operating profit as last year? f If Raindrops wants to maintain the same UCM percentage, what selling price must it charge next year, given the increase in variable costs per unit of $5? g What would be the net operating profit if the sales price were raised to $37.50 and sales were increased to 20,000 units for the improved sprinklers