(i) Use CVP analysis to determine the breakeven point in units and breakeven point in dollars. (5 marks)

(ii) Use CVP analysis to determine the margin of safety in units and in dollars. (4 marks)

(iii) Suppose Hendon Company is considering spending more on advertising in the year 2020. They estimate that sales would increase by $200,000 (compared to the year 2019) with extra advertising costing $168,000. Describe how to use CVP analysis to explain whether the company should go ahead with the plan. Show workings. (6 marks)

(6) Hendon Company produces and sells table lamps. For the year 2019, the company sold 60,000 units at $56 per unit. Other information includes: Sales Less: Variable costs Contribution margin Less: Fixed costs Operating income $3,360,000 1,008,000 2,352,000 1,254,400 $1,097,600 Use CVP analysis to determine the breakeven point in units and breakeven point in dollars. (5 marks) Use CVP analysis to determine the margin of safety in units and in dollars. (4 marks) (111) Suppose Hendon Company is considering spending more on advertising in the year 2020. They estimate that sales would increase by $200,000 (compared to the year 2019) with extra advertising costing $168,000. Describe how to use CVP analysis to explain whether the company should go ahead with the plan. Show workings. (6 marks)