Question 4 (20 marks) Smith & Smith Medical Clinic provides annual health check-up packages for all ages. The clinic charges $14,000 per package on average. The average variable costs per package are S10,500. The annual fixed cost is $980,000 The following is the estimated income statement of Smith& Smith for 2018 Sales (300 packages) Variable costs Contribution margin Fixed costs Net profit 4,200,000 3,150,00 1,050,000 980,000 70,000 Required Calculate the break-even point (in number of packages and in dollars of sales) a (8 marks) b Smith & Smith wished to increase the net profit by 150%, what is the number of package needed to be sold to achieve this target? (5 marks) The clinic is considering spending additional $1,000,000 in advertising programmes to promote the company's health check up products and it is expected that, with these programmes, sales volume can be doubled in 2018 with no change in selling price. Can Smith & Smith achieve the target of increased profit in (b) above if the clinic goe c s for the advertising cost? (7 marks)