Should the company consider the changes schedule 6? Why or why not? A comprehensive discussion is needed to fully answer this question. Please consider and discuss the following areas: fixed costs change, economies of scale, CM per unit change and sales fluctuation. In addition, give some real examples of additional cost increases for fixed costs and decreases for direct materials that could be implemented for this specific business. (at least 3 examples in total).

Volumes By Unit 400 1.!!!) 1,2\") per unit Sales Revenue 5 1,532,000 5 3,955,000 5 4,246,000 5 3,955 Less: Variable Costs Direct Materials 640,000 1,600,000 1,920,000 1,600 Direct Labor 120,000 300,000 360,000 300 Sales Commision 13,000 45,000 54,000 45 Office Utilities 8: Misc. Office Expenses 4,000 10,000 12,000 10 Sales Travel 9,600 24,000 23,300 24 Total Variable Costs 291,600 1,929,000 2,324,300 1,929 Total Contribution Margin 290,400 1,926,000 2,321,200 1,926 Less: Fixed Costs _ Total Fixed Cost 1,00?,000 1,00?,000 1,007,000 1,00? _ Operating Income 5 (216.6!!!" 5 969,!!!) S 1,364,2W S 969 Breakeven Units 510 units Breakeven Sales (5} 5 2,012,050 Volumes By Unit per unit 400 at!) 1000 1200 Sales [increase 2%] 4,034 1,513,040 5 3,222,230 4,034,100 5 4,340,920 Less: Variable Cost Direct Material [decrease 10%] 1440.00 526,000 1,152,000 1,440,000 1,223,000 Direct Labor 300.00 120,000 240,000 300,000 360,000 Sales Commission 45.00 13,000 36,000 45,000 54,000 Office Utilities 8: Misc. Office expenses 10.00 4,000 3,000 10,000 12,000 Sales Travel 24.00 9,500 19,200 24,000 23,300 Total Variable Costs 1319.00 222,600 1,455,200 1,319,000 2,132,300 Total Contribution Margin 2215.10 336,040 1,222,030 2,215,100 2,653,120 Less: Fixed Costs Total Fixed Cost (increase 25%} 1253.25 1,253,250 1,253,250 1,253,250 1,253,250 Operating Income 955 [322,210] 5 513,330 955,350 5 1,399,320