Standard Boxes Sustainable Deluxe Boxes Total Quantity Selling price per unit 108.00 18.00 126.00 $ 18.80 $ 23.00 $ 41.80 Revenue $ 2,030.40 $ 414.00 $ 2,444.40 Subtract: Variable Costs $ 1,080.00 $ 198.00 $ 1,279.00 Equals: Contribution Margin $ 950.40 $ 316.00 $ 1,166.40 Subtract: Fixed Costs $ 16.84 $ 83.50 $ 100.34 Equals: Operating Profit $ 933.56 $ 132.50 $ 1,066.06 Operating Profit % (based on revenue) 45.98% 32.01% 43.61% Contribution Margin % Question 2 The CEO is not convinced and still thinks that no form of a Deluxe Box, sustainable or not should be produced. The CEO indicates that consideration of the production of a Sustainable Deluxe Boxes will only be considered if it can achieve at least the same operating profit percentage for the Sustainable Deluxe Boxes as the operating profit percentage indicated under the ABC costing method for Standard Boxes (See Tab 3). Required (Complete the grey spaces). Using Operating Profit % Using Gross Profit % Required profit Subtract: Existing profit 45.98% See Question 1 32.01% See Q1 above Equals: Difference in additional profit required 13.97% Question 3 Required: Work out the percentage that the company should mark up on the costs of Sustainable Deluxe Boxes to achieve the same profit % as for the Standard boxes. (Complete the grey spaces) Using Operating Profit % Using Gross Profit % Revenue % 100.00% Subtract: Required Operating Profit Equals: Cost % 45.98% 54.02%