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e in the following table. Basic CVP relationships: manufacturer Vine Pty Ltd produces and sells bottles of wine. Price and cost data are in the
e in the following table. Basic CVP relationships: manufacturer Vine Pty Ltd produces and sells bottles of wine. Price and cost data are in the following P18.33 LO18.1 18.3 18.4 18.5 Selling price per bottle Variable costs per bottle: Direct material Direct labour Manufacturing overhead Selling costs Total variable costs per bottle Annual fixed costs: Manufacturing overhead Selling and administrative Total fixed costs Forecast annual sales (140000 units) $ 29,70 $ 432000 621000 $1053000 $5250000 (In the following requirements, ignore income taxes.) Required: 1. What is Vine's break-even point in units? 2. What is the company's break-even point in sales dollars? 3. How many units would Vine have to sell in order to earn a profit of $570 000? 4. What is the firm's safety margin? 5. Management estimates that direct labour costs will increase by 10 per cent next year. How many units will the company have to sell next year to reach its break-even point? 6. If Vine's direct labour costs do increase by 10 per cent, what selling price per unit must it charge to maintain the same contribution margin ratio
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