to improve profitability? Question 5, (Cost-Volume-Profit-Analysis) 20 Marks BT company, maker of high quality speciality bulbs has experienced steady growth over the last six years. However, increased competition has led the President of the company, to believe that an aggressive campaign is needed next year to maintain the company's growth. The company's accountant has presented the following data for the year 2019, for use in preparing the next year's advertising campaign. Cost Schedules Variable costs Direct labour per bulb $8 Direct materials $4 variable overhead $3 Variable cost per bulb $15 Fixed costs Manufacturing $25,000 Selling $40,000 $70,000 Admin Total fixed costs $135,000 Selling price per bulb $25 Expected sales 2019 $500,000 (20,000 units) The president has set the sales target for year 2020 at $550,000 (22,000 bulbs) $40,000 Admin $70,000 Total fixed costs $135,000 Selling price per bulb $25 Expected sales 2019 $500,000 (20,000 units) The president has set the sales target for year 2020 at $550,000 (22,000 bulbs) Required: a) What is the projected operating income for 2019? b) What is the contribution margin per unit for 2019? c) What is the break-even point in units for 2019? d) To attain the sales target in the year 2020, the company must incur an additional selling expense of $10,000 for advertising in year 2020. With all other costs remaining constant. What will be the break-even point in sales dollars for 2020 if the company spends additional $10,000 Present Value of S1 Received at the End ofn.Periods Periods Rate per Period 296 PS **w 12% 115 SPA 1 204 1 09524 09434 0.9346 09219 0174 60001 65009 M29 772 LAN SAM LNI " 13504 18334 13000 150 17125 1755 14467 MAY 16257 L36MA 1424 1600 LAUR 3 27232 24243 26730 23811 25371 2.4437 24018 2.3612 23216 22800 20707 IN 1939 14541 4 35460 34651 13872 33121 12307 33000 1004 1017S 29745 28137 283 26000 236496 LIMO 143 * 10 1996 205 2016 5 43295 42134 4.1000 39927 LARRY