BONUS PROBLEM (25 Points) The Sweet Corporation is a wholesale candy distributor. The company services the grocery, convenience and drug stores in a large metropolitan area. Small but steady growth in sales has been achieved over the past few years while candy prices have been increasing. The company has been formulating its plans for the coming fiscal year. Presented below are the data used to project the current year's net operating income of S184,000. $4.00 S2.00 S0.40 $280,000 $70,000 $30,000 S60,000 Average selling price per box of candy Cost per box of candy Selling Commission per box Salaries Office rental Insurance Advertising Expected annual sales volume (390,000) $1,560,000 REQUIRED: a. What is the break-even point in boxes of candy for the current year? b. What is the margin of safety in units? c. What volume of sales in dollars must they achieve in the coming year in order to break-even if the selling price stays at S4.00 but the cost of the candy increase by 20% per box What volume of sales in dollars must they achieve in the coming year to maintain the same net operating income as projected for the current year, if the selling price stays at $4.00 but the cost of the candy increases by 15% per box, the sales commissions increase by 25% per bor, and there is an income tax of 40%? d. BONUS PROBLEM (25 Points) The Sweet Corporation is a wholesale candy distributor. The company services the grocery, convenience and drug stores in a large metropolitan area. Small but steady growth in sales has been achieved over the past few years while candy prices have been increasing. The company has been formulating its plans for the coming fiscal year. Presented below are the data used to project the current year's net operating income of S184,000. $4.00 S2.00 S0.40 $280,000 $70,000 $30,000 S60,000 Average selling price per box of candy Cost per box of candy Selling Commission per box Salaries Office rental Insurance Advertising Expected annual sales volume (390,000) $1,560,000 REQUIRED: a. What is the break-even point in boxes of candy for the current year? b. What is the margin of safety in units? c. What volume of sales in dollars must they achieve in the coming year in order to break-even if the selling price stays at S4.00 but the cost of the candy increase by 20% per box What volume of sales in dollars must they achieve in the coming year to maintain the same net operating income as projected for the current year, if the selling price stays at $4.00 but the cost of the candy increases by 15% per box, the sales commissions increase by 25% per bor, and there is an income tax of 40%? d
