Tantu Company manufactures and sales a single product. During the year just ended the company produced and sold 60,000 units at an average price of Br.20 per unit. Variable manufacturing costs were Br 8 per unit, and variable marketing costs were Br 4 per unit sold. Fixed costs amounted to Br. 180,000 for manufacturing and Br.72, 000 for marketing. There was no year-end work-in-progress inventory. Ignore income taxes.

Instructions:

a)     Compute Tantu's breakeven point (BEP) in sales birrs for the year.

b)     Compute the number of sales units required to earn a net income of Br 180,000 during the year

c)     Tantu's variable manufacturing costs are expected to increase 10 % in the coming year. Compute the firm's breakeven point in sales birrs for the coming year.

d)     If Tantu's variable manufacturing costs do increase 10 %, compute the selling price that would yield the same CM-ratio in the coming year.