REVISION-Week 10 Question 1 Clatter Company sells one product. Relevant data for this product is Sales price per unit-$30 Variable costs per unit-$10 Contribution margin per unit-$20 Fixed costs $25 400 (a) Clatter Company has a target profit of $8 000. How many units would need to be sold to achieve this target profit? (b) Clatter Company expects to be able to sell 1,800 units. Calculate the profit Clatter Company would car if 1,800 units were sold (c) At the end of the year, Clatter Company has only sold 1,200 units, instead of the estimated 1,800 units i. Calculate the profit Clatter Company did generate ii. Can you explain to Clatter Company's management why this figure is negative? iii. How many more units would Clatter Company need to sell to breakeven (d) Clatter Company believes at the current selling price of $30 per unit, they will never be able to sell more than 1,200 units per year. Clatter Company is investigating a number of alternatives to attempt to increase profit. i. The first alternative is to make no changes to selling price or fixed costs, but attempt to reduce variable costs. What value, per unit, would variable costs need to be reduced to in order for breakeven point to be 1,200 units? ii. The second alternative is to increase fixed costs by $5,000 but decrease variable costs by $4.67 per unit. What is the new breakeven point in units? iii. Which of the two alternatives would you recommend? Why?