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please hurryy (c) A company has direct production costs equal to 50% of the total annual sales and indirect production cost (fixed charges, overhead, and
please hurryy
(c) A company has direct production costs equal to 50% of the total annual sales and indirect production cost (fixed charges, overhead, and the general expenses) equal to 200,000. Annual sales amount to 800,000. The management proposes to increase annual sales to compensate for a 20% Page 6 of 9 increase in indirect cost, and maintain the same gross profit. increase in indirect cost, and maintain the same gross profit. (i) What is the new sale level? [7 marks] (ii) What would the gross profit be, if the management proposes to increase the annual sales of 800,000 by 30% [4 marks] (iii) What is the difference between Net Profit and Gross Profit? [3 marks] [Total 35 marks)Step by Step Solution
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