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Question 5 (11 marks) Enviro Doors Ltd sells a single product - sliding doors to home improvement retailers nationwide. The company is planning for next
Question 5 (11 marks) Enviro Doors Ltd sells a single product - sliding doors to home improvement retailers nationwide. The company is planning for next year, and the following profit statement was recently discussed at the management meeting. Required: a) How many units must be sold to break even? (2 marks) b) How much is the total break-even sales dollars for the company? (1 mark) c) Based on the above information, the national sales manager believes that if they invest an additional $32,000 in advertising, they will increase sales volume by 10,000 units. Prepare a forecasted contribution margin income statement for Enviro Doors Ltd if they incur additional advertising costs. (4 marks) d) Do you think it's a good suggestion? Explain. (2 marks) e) Suggest another way the company can increase its profits next year. (2 marks) SHOW YOUR WORKINGS
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