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 Variable direct material costs $13,800 $ 9 Variable direct labour & MOH costs $ 2 Variable selling costs $ 3 Fixed manufacturing costs $ 18,200 Fixed admin costs $ 79,100 Selling price per towel roll $ 23 # of towel rolls sold / month Income tax rate 18,800 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): $135,000 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 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 They think they can sell another 23,500 rolls if they take these steps Should they go ahead with this plan? Explain it in a way management can understand your advice $10,300 $0.60 13 marks 4 marks 7 marks 3 marks 9 marks 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): $135,000 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 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 They think they can sell another 23,500 rolls if they take these steps Should they go ahead with this plan? Explain it in a way management can understand your advice $10,300 $0.60 4 marks 7 marks 3 marks 9 marks 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? 2 marks 7 If things go well and sales jump by 50% above break-even in March, how much more operating income can the company expe 3 marks afasdfjaslkjv10 41 marks