the qs are on the image it's about the faux beauty Ltd

Case Study Case Study Presentation (10%) Breakeven analysis for Faux Beauty Ltd, a luxury cosmetics manufacturer l'aux Beauty .td (FB1), located in Sydney, produces and sells luxury bathroom and spa products for 5 I lotels to use in their rooms and suites. The company has been producing these products for the Australian market for over 20 years and are considered leaders from both a quality and efficiency perspective by their customers. l'aux cauty Ltd suffered a severe drop in sales and profit performance for the year ended 30 June 2019. This has been correlated to increased pressure from overseas Competitors in the luxury spa COSIDelic Irlarkel. The Income Stalement revealed that rel sales were $1 500 000 with a profit of $310 000 Unit sales were 300000, and total costs were $1 190 (00. A breakdown of costs and expenses is presented below: Fixed $350 000 Variable S600 000 Tutal $950 000 Cost of Sales( includes manufacturing costs) Selling, Marketing and Distribution Expenses General and Administrative Expenses 108 000 36 0(0) 144 000 72 000 21 000 96 000 Total $530 000 $660 000 $1 190 000 In response to the bad result, the Operations Manager has formulated a number of options for the year ending 30 June 2020 to try and improve performance. Independent policy options being considered are sel oul below: 1. Update factory machinery and production methods to adjust the mix of fixed and variable cost of sales (which includes manufacturing costs) to 10% fixed and 60% variable. 2. Increase the selling price by 15%. Wilh no changes to costs and expenses bul unil sales will decrease by 10'6. 3. Change the manner in which sales stall are remuneraled. It is proposed to pay sales slall on the basis of a base salary of $32 000 plus a 5% commission on tiel sales. The current policy is to pay fixed total salaries of $105,000 Source: Iluggell. J. Meilt. J. Edwards, Land Thing, M.Accounting. Wiley: Questa sales staff on the basis of a base salary of $32 000 plus a 5% commission on net sales. The curenl policy is to pay lixed Lolal salaries of $105.000 Source: Home Melin t ards and illing 1. crnunting Wiley: Censland Case Study Case Study Presentation (10%) Required: 1. Using the information provided : a) Prepare an income slalement for the year ended 30 June 2019 showing contribution margin. b) What is the company's 2019 break even point in units? c) What is the company's 2019 break even point irl Sales dollars? 2. Calculate the break even poisil and profil for each of the three (3) options being considered by management. 3. What option, if any, should be recommended to management to Improve the profitability of l'aux Beauty Ltd? Explain why you are recommending this option by critically evaluating each course of action. 1. Whal other factors should be considered? Case Study Case Study Presentation (10%) Breakeven analysis for Faux Beauty Ltd, a luxury cosmetics manufacturer l'aux Beauty .td (FB1), located in Sydney, produces and sells luxury bathroom and spa products for 5 I lotels to use in their rooms and suites. The company has been producing these products for the Australian market for over 20 years and are considered leaders from both a quality and efficiency perspective by their customers. l'aux cauty Ltd suffered a severe drop in sales and profit performance for the year ended 30 June 2019. This has been correlated to increased pressure from overseas Competitors in the luxury spa COSIDelic Irlarkel. The Income Stalement revealed that rel sales were $1 500 000 with a profit of $310 000 Unit sales were 300000, and total costs were $1 190 (00. A breakdown of costs and expenses is presented below: Fixed $350 000 Variable S600 000 Tutal $950 000 Cost of Sales( includes manufacturing costs) Selling, Marketing and Distribution Expenses General and Administrative Expenses 108 000 36 0(0) 144 000 72 000 21 000 96 000 Total $530 000 $660 000 $1 190 000 In response to the bad result, the Operations Manager has formulated a number of options for the year ending 30 June 2020 to try and improve performance. Independent policy options being considered are sel oul below: 1. Update factory machinery and production methods to adjust the mix of fixed and variable cost of sales (which includes manufacturing costs) to 10% fixed and 60% variable. 2. Increase the selling price by 15%. Wilh no changes to costs and expenses bul unil sales will decrease by 10'6. 3. Change the manner in which sales stall are remuneraled. It is proposed to pay sales slall on the basis of a base salary of $32 000 plus a 5% commission on tiel sales. The current policy is to pay fixed total salaries of $105,000 Source: Iluggell. J. Meilt. J. Edwards, Land Thing, M.Accounting. Wiley: Questa sales staff on the basis of a base salary of $32 000 plus a 5% commission on net sales. The curenl policy is to pay lixed Lolal salaries of $105.000 Source: Home Melin t ards and illing 1. crnunting Wiley: Censland Case Study Case Study Presentation (10%) Required: 1. Using the information provided : a) Prepare an income slalement for the year ended 30 June 2019 showing contribution margin. b) What is the company's 2019 break even point in units? c) What is the company's 2019 break even point irl Sales dollars? 2. Calculate the break even poisil and profil for each of the three (3) options being considered by management. 3. What option, if any, should be recommended to management to Improve the profitability of l'aux Beauty Ltd? Explain why you are recommending this option by critically evaluating each course of action. 1. Whal other factors should be considered