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Analytical Questions Aysha Bakery specializes in selling European bread and deserts. The bakery reports the following total costs at two levels of production. 5,000 Units

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Analytical Questions Aysha Bakery specializes in selling European bread and deserts. The bakery reports the following total costs at two levels of production. 5,000 Units 10,000 Units $20,000 4,000 34,000 Sugar used for making $10,000 bread and deserts Marketing on Social Media 4,000 A French Baker to make 17,000 customed cakes Indirect materials 1,000 Taxes 6,000 Depreciation 1,500 2,000 6,000 1,500 Requirements: 1. Classify each cost as variable or fixed. Justify Your answer. (Rubric: 0.5 mark for each correct classification and 1 for the correct Justification. Total 4 marks) RXY Co., a manufacturer of electronic tablets. The below Illustration presents relevant data for the tablets sold by this company in 2019. Sales Price Variable Costs Fixed Costs Sales $25 pertablets $15 Per Unit $135,000 20,000 Units Instructions: (Use the Equation method only) a. What is the Net income for 2019? (Rubric: 1 mark for the correct formula and the calculations and 1 for the correct answer. Total 2 marks) b. What is the break-even point in (1) units and (2) dollars for 2019? (Rubric: 1 mark for the correct formula and the calculations and 1 for the correct answer. Total 2 marks) c. I. Assume that management set the sales target for the year 2020 at a level of $550,000 (22,000 tablets). RXY's management believes that to attain the sales target in 2020, the company must incur an extra fixed expense of $10,000 for promotion in 2020, with all other costs remaining the same. What will be the break- even point in sales dollars for 2020 if the company spends the extra $10,000 on fixed costs? (Rubric: 2 mark for the correct formula and the calculations and 1 for the correct answer. Total 3 marks) If the company spends the additional $10,000 for promotion in 2020, what is the sales level in dollars and units required to equal the 2019 Net income you calculated in part a? (Rubric: 2 mark for the correct formula and the calculations and 1 for the correct answer. Total 3 marks)

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