RollmeUP is a eco$-$focused company that sells alternative products aimed at reducing waste.

They've developed a cloth form of "papertowel" rolls that can be rewashed and rerolled for cleanup use.

Sales have been growing steadily and they are hoping to expand in near future as consumers

take action to change their habits of daily living. The following cost and revenue data is a monthly

result that demonstrates their outcomes thus far

Fixed selling expenses $ $16,800$

Variable direct material costs $ $5$

Variable direct labour & MOH costs $ $4$

Variable selling costs $ $1$

Fixed manufacturing costs $ $13,100$

Fixed admin costs $ $42,200$

Selling price per towel roll $ $17$

# of towel rolls sold $/$ month $11,900$

Income tax rate $21\%$

Requirements

$1$ What is their current level of operaing income? $($present in contribution margin format$)$

$2$ How many rolls do they need to sell to break$-$even? What is the total sales dollar amount at this break$-$even level?

$3$ If they want to earn the following profit in April $($after taxes$)$: $ $128,000$

what # of paper towel rolls do they need to sell? What sales $ level do they need to reach that profit?

$4$ In April their supplier of direct materials informed them that the costs will be increasing by $30\%$

How much will RollmeUp need to increase their prices to achieve the same level of contribution margin?

$5$ Management is considering holding the price the same but increasing their advertising budget next month by $ $11,700$

They also plan to pay their salespeople a new commission of $10\%$ of the price in order to increase their unit sales

And to differentiate their product they will add $2$ more sheets to their rolls which will increase material costs by $$1\mathrm{.}03$

They think they can sell another $14,875$ rolls if they take these steps

Should they go ahead with this plan? Explain it in a way management can understand your advice

$6$ Management also wants to know how much of a drop in their current activity level in March can be absorbed by the company

before they are at risk of not being able to cover their expenses?

$7$ If things go well and sales jump by $50\%$ above break$-$even in March, how much more operating income can the company expect?