CVP- single product... Homework A summary of a manufacturing organization's budgeted profit statement for its next financial year, when it expects to be operating at 75% of capacity, is given bellow. 288 000,00 Sales Less: 9000 units at $32 Direct materials Direct wages Production overheads:Fixed Variable 54 000,00 72 000,00 42 000,00 18 000,00 186 000,00 102 000,00 Gross profit Less: Admin, selling and distribution costs: Fixed Varying with sales volume 36 000,00 27 000,00 63 000,00 39 000,00 Net profit Cost volume profit analysis... Homework... Required: (a)(i) Calculate the break even point in units and in value. (ii) Calculate the profit that could be expected if the company operated at full capacity. (b)lf has been estimated that: 1. If the selling price per unit were reduced to $28, the increased demand would utilize 90% of the company's capacity without any additional expenditure and II. To attract sufficient demand to utilize full capacity would require a 15% reduction in the current selling price and a $5,000 special advertising campaign. Present a statement showing the effect of the two alternatives and compare with the original budget. Advice management which plan should be adopted