The University of the West Indies The Department of Chemistry CHEM3401 Question 1 The revenue and cost structures of Oakpress Limited are given below; (i) Calculate the contribution margin ratio. (ii) What is the breakeven point in units and in dollars? (2 marks) (iii) If the company normally produces and sells 12,000 units, calculate the margin of safety in units and in dollars. (4 marks) (iv) If the company's variable cost per unit is reduced to $292.50 as a result of process reengineering, what must the new selling price be if the company wishes to retain the contribution margin ratio calculated in requirement (i)? (4 marks) (v) If the company wishes to report a profit of $1,040,000 how many units must be sold to achieve this objective? (3 marks) (vi) What is the significance of the breakeven point? (4 marks) (vii) How does a company lower it's breakeven point? Is this a desirable objective? ( 4 marks)