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(3) Historically, Datura's total variable costs have been approximately 60% of sales. What is the ratio of variable costs to sales in 2016? How would

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(3) Historically, Datura's total variable costs have been approximately 60% of sales. What is the ratio of variable costs to sales in 2016? How would fixed costs had been affected if Datura sold only 14,000 sets of pottery in 2016? (5) How many sets of pottery would Datura have to sell to realize a net operating income of 2,500,000? What is the degree of operating leverage for Datura in 2016? What would happen if sales saw an increase of 8% in 2017? Comprehensive Problem Cost Volume Profit Analysis Based in Italy, Datura, Ltd., is an international importer-exporter of pottery with distribution centers in the United States, Europe, and Australia. The company was very successful in its early years, but its profitability has since declined. As a member of a management team selected to gather information for Datura's next strategic planning meeting, you have been asked to review its most recent contribution margin income statement for the year ended December 31, 2016, which appears below: Datura, Ltd Contribution Margin Income Statement For the Year Ended December 31, 2016 Sales Revenue 13,500,000 Less: variable costs Purchases Distribution Sales Commission Total variable costs 6,000,000 2,115,000 1.410,000 9.525,000 Contribution Margin 3.975,000 Less Fixed costs Distribution Selling General and administrative Total fixed costs 985,000 1,184,000 871,875 3.040.875 Net operating income 934 125 In 2016, Datura sold 15,000 sets of pottery. Requirements: (1) For each set of pottery sold in 2016, calculate the following: a. b. Sales price per unit variable purchase cost per unit variable distribution cost per unit variable sales commission per unit contribution margin per unit d. e. (2) Calculate the breakeven point in units and in sales euros

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