Operational information Part 3 The owners continued their review of operations, focusing next on the Calgary Region which was organized similarly to the Penticton Region and produced and sold the same product line as the Penticton Region. The revenues and expenses for the last four months for this product line in the Calgary Region are presented below. The manager of operations at the Calgary region provided the following cost information for each of the mixed costs: Requirement \#3 (17 marks) The owners are grateful for the information provided by the Calgary region respecting the cost behaviours for this product line. Their focus now is on understanding the impact of a change in any of the factors that impact profits. They would like you to complete some cost-volume-profit (CVP) analysis. Note: Use 2 decimal places for contribution margin (CM) and CM ratios. 1. What is the annual total fixed cost based on the information provided? (1 mark) 2. What is the annual break-even sales in units (assume that fixed costs are incurred uniformly throughout the year). (2 marks) 3. What Sales Revenues are required annually to break-even? (2 marks) 4. How many units need to be sold to achieve a target monthly profit of $85,000 ? (1 mark) 5. What profit will be realized if 75,000 units are sold during the year? ( 2 marks) 6. Create a CM income statement at 75,000 units annually including both total and per unit data. ( 3 marks) 7. The owners asked the Calgary Region to consider options to improve profitability based on the calculations from \#5 above (at 75,000 units annually). Two proposals were submitted to the owner. They would like you to analyze each option and provide a recommendation with an explanation on which (if any) option should be implemented to improve profitability. Based on your calculations in \#5 above, prepare a comparative CM income statement to demonstrate the change and impact to profits for both of the options. a) The operations manager has proposed that a reduction of $8.50 in the selling price per unit would increase sales by 6,800 units. ( 3 marks) b) The sales manager has also considered options to improve profitability. She has proposed that an increase in advertising of $109,000 annually would increase sales by 6,800 units