Question 8 FG Company specializes in the manufacture of tablets, laptops and desktop PCs. Here are its prices and costs: Tablets Laptops Desktop PCs Selling price per unit 120 400 1200 Variable cost per unit 80 300 500 Units Sold 9,000 900 100 Variable costs include the labour costs of the skilled and unskilled workers. Fixed costs of 400,000 per year include building and equipment costs, marketing costs, and the costs of administration. FG company is subject to a 30 percent tax rate on income. Required: a) Given the above information, how much will FG Company earn each year after taxes? (7 Marks) b) Assuming the above sales mix is the same at the break-even point, at what sales revenue does FG Company break even? (6 Marks) c) FG Company is considering becoming more specialized in Tablets and Laptops. The management recently learned that the sales in units for Tablets will increase to 12,000 per year, the number of Laptops will increase to 4,000 per year, while the number of Desktop PCs will drop to zero. With this change in product mix, the company would increase its fixed costs to 550,000 per year. Under these circumstances determine how many units of each product must be sold to break even. (6 Marks) d) "The assumptions of CVP analysis are so simplistic that no firm would make a decision based on CVP alone. Therefore, there is no reason to learn CVP analysis." Discuss