Problem 8.10 The Cairns Backpackers Lodge belongs to the Australian Backpackers Association. The Association provides an accommodation reservation service and charges accommodation owners 10 per cent of room selling price as a commission. All of Cairns Backpackers Lodge room sales are made through the Australian Backpackers Association and the lodge provides a daily room cleaning service for all occupied rooms. The following data has been projected for the Cairns Backpackers Lodge in the forthcoming year: Next year's projected room sales 25,000 $20 $4 $112,000 Required: a. What is the Cairns Backpackers Lodge breakeven level of sales? b. What is the Cairns Backpackers Lodge projected level of profit in the fortheoming year? c. Demonstrate which of the following would reduce the lodge's projected profits the most: i. a 10 per cent decrease in the selling price (assume commission remains at 10 per cent of sales). ii. a 10 per cent increase in the cost per room cleaned, iii. a 10 per cent increase in fixed costs. iv. a 10 per cent decline in projected sales volume. v, a 10 per cent increase in the commission rate charged by the Backpackers Association