Accounting

2B Question Cost-Volume-Profit Analysis d0 marks Pangani Company has the following revenue and cost structure for 2014 Total Fixed Costs $60,000 Selling price per unit $20 Variable costs per unit $16 Target Net Income for 2014 $52,000 (after taxes) Tax Rate 35% Required: 1. Calculate the break-even point in units. 2. Calculate the sales revenue (in dollars) required to achieve the target income. 3. Calculate the difference in pre-tax income when one extra unit is sold. 4. If fixed costs increased by 10%, what is the new unit contribution margin required to 5. maintain the same break-even point as before the increase in the fixed costs. manager If other are constant and the decision is independent, should the increase in price or a decrease in variable cost to achieve the new contribution margin required in your answer to number 4 above? Give an explanation Break-even point in Sales revenue (S) to Difference in pre-tax New UCM for units achieve target income for each extra same break-even income unit point when TFC increase by 10%