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Camview Ltd. produces high quality 3D Cameras. The information relating to the production of their cameras for 202 1 is given below: Annual sales volume
Camview Ltd. produces high quality 3D Cameras. The information relating to the production of their cameras for 202 1 is given below: Annual sales volume 1,3 70 units Selling price $390 Variable materials co st $460 Annual f ixed overheads $ 108,000 Variable selling and distribution costs $ 190 Annual f ixed manufacturing costs $ 180,000 Required: 3) Calculate the contribution margin and the contribution margin ratio for 3D Cameras in 2021. (2 marks) b) Calculate the breakeven point of Camview's product in units and sales dollars for 2021. (2 marks) c) Calculate the margin of safety. (1 mark) (1) The marketing department proposes that if they spend a further $50 variable marketing cost per unit, the company will be able to increase annual demand. Calculate the new breakeven point in units under this proposal. (2 marks) In reference to your calculations in part (d), assume if the marketing department increased variable costs by $50 per unit, it would result in an increase in annual demand to 1 ,4 50 units. Briey discuss if you would recommend management accept this proposal. Provide support for your recommmdation. (3 marks) (2+2+1+2+3=10marks)
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