Clean and Bright Company makes 2 types of organic soaps: Original and Delicate. In the coming year, the company expects to sell 30,000 units of Original soaps and 15,000 units of Delicate soaps. Information on the two products is as follows: Price Variable cost per unit Total fixed cost is $127,960. Required: (i) Original Soap $12 $4 (ii) Delicate Soap $20 $8 4.570 1 = 4,570 Compute the breakeven point for Original and Delicate Soap in sales dollars. (7 marks) Package contribution margin ($8 x 2) + ($12x1) = $ 28 Break even packages $17.960/ 28= 4,570 package Breakeven sales = 19,140 x $12) + Based on the answer in (i), calculate the margin of safety in dollars. Current sales = 130,000 & $12) + (15,000 $20) = $660,000 - $201,080 = $458.920. X (2 marks) Margin of safety = $660,000 - $201,080 (iii) Though the company manages to keep the same amount of fixed costs next year, it expects that the variable cost will increase due to inflation, explain what would happen to the breakeven point. (2 marks) 4570x2=9140

Clean and Bright Company makes 2 types of organic soaps: Original and Delicate. In the coming year, the company expects to sell 30,000 units of Original soaps and 15,000 units of Delicate soaps. Information on the two products is as follows: Total fixed cost is $127,960. Required: 4.5702=9,140 4,571=4,57 (i) Compute the breakeven point for Original and Delicate Soap in sales dollars. Prekage conceribution margin ($82)+({121)=$2} (7 marks Breat even pocktages {107.960/28=4,570 package Breateren soles =19.140x$ (ii) Based on the answer in (i), calculate the margin of safety in dollars. Current sales =(30,000$12)+(15,000$20)=$660,000 Margin of safety =$660,000$201,080=$458.920. (iii) Though the company manages to keep the same amount of fixed costs next ye: it expects that the variable cost will increase due to inflation, explain what wou happen to the breakeven point