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Question 4 Unidus Corp is a condom manufacturing company in South Korea. The prices share price of condoms soars after the country's Supreme Court decriminalized
Question 4 Unidus Corp is a condom manufacturing company in South Korea. The prices share price of condoms soars after the country's Supreme Court decriminalized adultery. The company wants to increase production and has given you the following information for 2016 Eight million packs of condoms are expected to be produced and sold at $40 per pack. The marginal cost for producing each pack is $30. Unidus Corp will invest $4,000,000 in the acquisition of a manufacturing plant. This cost is not expected to change over the period. REQUIRED: (a) Calculate the break-even point in units and in Ghana Cedis and prove your answer. (b) What is the contribution margin ratio for Unidus Corp? (c) Supposed that management of Unidus Corp would like to achieve a net profit of $400,000. What level of sales in unit and in sales is required to earn the profit? (d) Assume also that the management of Unidus Corp would like to achieve a net profit after tax of $400,000. If the tax rate is 20% per annum while the company is evaluating additional fixed advertisement of $500,000 which eventually will result to 10% increase in variable cost, how many units must be sold to arrive at the target profit? (e) The management accountant has also estimated that there will be an increase in the selling price from $40 per pack to $50 per pack. What will be the effect of the decision on the break-even point in units and sales value of the Unidus Corp? Question 5 (a) A company sells three products: X, Y and Z. Cost and sales data for one period are as follows: Sales volume Selling price per unit Variable cost per unit 2,000 units GHS3 GHS2.25 2,000 units GHS4 GHS3.5 5,000 units GHS2 GHS1.25 Fixed costs GHS3,250 Required Construct a multiple-product graph and indicate the break-even point. (b)
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