1. From the books of Hawai Bros. the following information has been extracted;

Sh.

Sales 1,200,000

Variable costs 720,000

Fixed costs 130,000

Profit before tax 350,000

Taxes are charged at 40%

The firm is proposing to buy a new plant which can generate additional annual profit of Sh.50,000. The fixed cost of the new plant is expected to be Sh.20,000. The new plant will increase the sales volume by Sh.200,000. It can be assumed that the ratio between sales and variable costs remain the same. Based on the above information;

Required:

a) Find out new Break-Even point

b) Sales to earn present level of profit

c) Sales to earn present level of profit plus expected profit on proposed investment

d) Maximum after tax profit potential after plant expansion