5. Errington company makes a product that sells for tk. 15 per unit. Variable costs are (20) tk.6 per unit and fixed costs are total tk. 1,80,000 annually. Required: What is the product's CM ratio? *) Determine break-even point in units and in sales taka. in) The company estimates that sales will increase by tk. 45.000 during the coming year due to increase demand. By how much should net income increase? iv) Assume that the operating results for last year were as follows Particulars Sales Less: Variable cost of sales Contribution Margin Les Total Fixed cost Net Income Profit Amount (Toka) 3,60,000 1.44.000 2.16.000 1.80,000 36.000 It is expected that sales will be increased by 15% next year. By how much should net income increase? v) Refer to the original data assume that the company sold 28,000 units last year The sales manager is convinced that a 10% reduction in selling price combined with tk. 70,000 increase in advertising expense, would cause annual sales in units to increase by 50%. Prepare two contribution margin income statements, one showing the results of last year operations and another showing what the results of operations would be if these changes were made. Would you recommend that the company do as the sales manager suggest