Perfetti Van Melle: Perfetti is a leading manufacturer and wholesale distributor of confectionary products in India. The company has seen steady growth in its Candy Business in last few years. Despite rising costs and selling prices, the sales growth has been consistent with expectations. The company intends to formulate a plan for the coming year and has projected a post-tax Net Income of $264960 (Check for accuracy). Refer to the data presented below used to obtain the projected Net Income for Perfetti and answer the subsequent questions.

Avg. Selling Price

9.60 Per Kg

Avg. Variable Costs:

Candy Production

4.80 Per Kg

Selling Expense

0.96 Per Kg

Annual Fixed Cost:

Selling

384000.00

Admin.

672000.00

Expected Annual Sales Volume

390000 Kg

Tax Rate

35%

Perfetti is planning to increase the Selling Prices by 15% in subsequent year due to rising input costs. Assuming all other costs to be constant:

a. What would be the BEP for Perfetti in Kgs for the coming year?

b. What Selling Price should be charged in the subsequent year to cover for 15% increase in variable Costs and still maintain the upcoming year's contribution margin?

c. What volume sales should be achieved in order to maintain the same net income post taxes for the coming year if selling price remains the same at 9.60 per Kg and the variable costs decrease by 15%?