Question 3 (20 MINUTES, 14 MARKS)

Part A

Sicilian Bakery had the following operating results, based on sales of 100,000 units, in 2020:

Sales $2,000,000

Total variable Expenses $1,200,000

Total fixed costs $400,000

The corporate tax rate was 30%.

REQUIRED:

1. If the company wanted to earn net income after tax of 7% of sales, what level of sales would be required to earn that amount?

Part B

Calculate the correct amount for each question mark:

Sales ????

Total VC $9,750

Total CM ????

Total fixed costs $$$$

Operating income $1,364

# units sold 125

Selling price per unit $130

Variable cost per unit ????

CM per unit ????

CM ratio 40%

BEP in sales $$$ ????