Assignment 3) CVP analysis 25% Cutlery Ltd produces cutlery sets of high-quality wood and steel. The company has a standard cutlery set that sells for 625 . At present, the cutlery is manufactured in a small plant that relies heavily on direct labor workers. Last year, the company sold 30,000 standard cutlery sets, with the following results: Question 1 A. Determine VC per unit, CM ratio, and the degree of operating leverage at last year's level of sales B. Determine the break-even point in cutlery sets (units), and construct a graphical illustration, illustrating the break-even point Question 2 Due to an increase of material prices, the variable costs will increase by 3 per cutlery set next year. The selling price per set remains constant at 25. A. Determine the new CM ratio and break-even point in cutlery sets, and determine how many sets will have to be sold next year to earn the same profit (90,000) as lastyear? B. Based on the increased material prices, the CEO is determined to raise the selling price on the standard cutlery sets. If Cutlery Itd. Wints to maintain the same CM ratio as last year, what selling price per cutlery set must it charge next year to cover the increased material prices? Question 3 Refer to the original data. The company is discussing the construction of a new, automated plant for manufacturing. The new plant would decrease variable costs per cutlery set by 40%, but it would cause fixed costs to double in amount per year. A. If the new plant is built, what would be the company's new break-even point in revenue ? B. If the new plant is built, how many cutlery sets will have to be sold next year to earn the same profit (90,000) as last year? Question 4 Refer to question 3 , and assume the new plant is built and that next year the company manufactures and sells 30,000 cutlery sets (the same number as sold last year). A. Prepare a contribution statement of profit or loss, using the same set-up as in the data table above question 1. B. Assisting the management in their decision, would you recommend constructing the new plant? Justify your