Exercise 1 APPLICATION: (SHOW ALL CALCULATIONS) Given the following: Income Statement (End of Year, 2017) Industry % of sales 100 12 40 Net Sales 500,000 Less: Inventory (8) 60,000 Gross Purchases 200,000 Less: discounts 20,000 Net Purchases 36 48 10 38 62 Total Goods Available Less: inventory (E) 240,000 Total Cost of Goods Sold Gross Margin 335,000 Less: Variable Expenses Sales Commissions 130,000 Deliveries 26 27 35 Contribution Margin 200,000 Less: Fixed Expenses Rent Salaries Distribution Rights 5000 50,000 95,000 10 12 23 12 Net Profit (BT) 50,000 If there is a/are performance problem(s), what is/are the major source(s) of the discrepancy(ies) between the industry's marketing performance and that of your employer? Show your calculations and explain your answer (be specific) a. Calculate the firm's 2017 Breakeven Sales figure. What is the new Breakeven Sales figure if the firm's management wants to increase next year's profit margin by 2% of Total Sales? (hint: the 2% increase in sales becomes a target profit). b