Question 4 What is the new breakeven point in unit and dollar for Emma's Dairy Ltd, and the breakdown per product type? Emma's Dairy Ltd sells pasteurised milk in cartons to supermarkets throughout the country. Its latest Statement of Comprehensive Income for the year ended 31 December 2019 is as follows: $ $ Sales (200,000 cartons @ $6 each) 1,200,000 Less: Cost of sales (800,000) Gross profit 400,000 Less: Other expenses Advertising Manager's salary Administrative expenses (50,000) (96,000) (154,000) (300,000) 100,000 Net profit Cost of sales are variable costs. All other expenses are considered fixed costs. Required: a) Calculate the contribution margin per milk carton for 2019. b) What was the breakeven point in unit and dollar for 2019? c) Emma's Dairy Ltd plans to increase its target net profit to $120,000 in the next financial year. How many cartons of milk would need to be sold to achieve this? d) Emma's Dairy Ltd is considering outsourcing part of the processing functions to another company in a bid to better manage costs. Outsourcing will enable the company to reduce the fixed costs by 10%, but would increase the variable cost per carton by S0.20. If Emma's Dairy Ltd wishes to achieve the same amount of net profit (i.e. $100,000), advise whether or not this proposed outsourcing is a better option. Discuss quantitative and qualitative factors. e) Emma's Dairy Ltd is also considering introducing a "Low Fat" variety of its milk product. The "Low Fat milk will sell for $6.50. As the "Low Fat' milk will involve additional processing to reduce the fat content in the milk, variable cost will increase by $0.30 per carton. Fixed cost will increase by $20,000 due to production and administrative changes. The sales mix is expected to be 60% normal ("Full Cream") milk and 40% "Low Fath milk