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can anyone help me to solve this? CT5.2 The condensed income statement for Peri and Paul ple for 2020 is as follows. Peri and Paul

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CT5.2 The condensed income statement for Peri and Paul ple for 2020 is as follows. Peri and Paul ple Income Statement For the Year Ended December 31, 2020 Sales (240,000 units) 1.200,000 Cost of goods sold 800,000 Gross profit 400,000 Operating expenses Selling 280,000 Administrative 150,000 430,000 Net loss (30,000) A cost behavior analysis indicates that 75% of the cost of goods sold are variable, 42% of the selling expenses are variable, and 40% of the administrative expenses are variable. Instructions (Round to nearest unit, pence, and percentage, where necessary. Use the CVP income statement format in computing profits.) a. Compute the break-even point in total sales and in units for 2020. b. Perihas proposed a plan to get the company "out of the red and improve its profitability. She feels that the quality of the product could be substantially improved by spending 0.25 more per unit on better raw materials. The selling price per unit could be increased to only 5.25 because of com- petitive pressures. Peri estimates that sales volume will increase by 25%. What effect would Peri's plan have on the profits and the break-even point in sales of the company? (Round the contribution margin ratio to two decimal places.) c. Paul was a marketing major in college. He believes that sales volume can be increased only by intensive advertising and promotional campaigns. He therefore proposed the following plan as an alternative to Peri's: (1) increase variable selling expenses to 0.59 per unit, (2) lower the selling price per unit by 0.25, and (3) increase fixed selling expenses by 40,000. Paul quoted an old marketing research report that said that sales volume would increase by 60% if these changes were made. What effect would Paul's plan have on the profits and the break-even point in sales of the company d. Which plan should be accepted? Explain your answer. Weygandt I Limun

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