Use below information for Questions $1$ to $3$:

Company X manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a

commission at a percent of sales basis. Partial income statement for the last two years is as follows:

Beginning of $2018,$ the company is considering hiring its own sales staff to replace the network of agents. It will pay its

salespeople a commission of $8\mathrm{.}30\%$ and incur additional fixed costs of TL$7,580,000.$

Q$-1)$ Calculate the degree of operating leverage at sales TL$73,000,000$ if the company uses sales agents.

Q$-2)$ Assume the company employs its own sales staff. Calculate the change in net income in TL if sales decrease by

$10\%.$

Q$-3)$ Calculate the estimated sales volume in TL that would generate an identical net income for the year ending

December $31,2017,$ regardless of whether the company uses sales agents or employs its own sales staff. Use below information for Questions $4$ to $6$ :

Company $x$ is a restaurant in Salihli, Manisa. It specializes in southwestern style meals in moderate price range. Ziya

Ta$$kent$,$ the manager of Company X$,$ has determined that during the last $2$ years the sales mix and contribution margin

ratio of its offerings are as follows:

Ziya Bey's goal is to generate a target net income of TL$113,000.$ The company has fixed costs of TL$1,053,000$ per annum.

Q$-4)$ Calculate the sales of Beverages in TL that would be necessary to achieve the desired target net income.

Q$-5)$ Ziya Bey believes the restaurant could greatly improve its profitability by reducing the complexity and selling price

of its entrees to increase the number of clients that it serves. It would then more heavily market its appetizers and

beverages. He is proposing to reduce the contribution margin ratio on the main entrees to $10\%$ by dropping its

average selling price. He envisions an expansion of the restaurant that would increase fixed costs by an additional

TL$583,000.$ At the same time, he is proposing to change sales mix as follows:

Calculate the sales of Beverages in TL that would be necessary to achieve the desired target net income.

Q$-6)$ Suppose that Ziya Bey reduces the selling price on entrees and increases the fixed costs as proposed in Question $5,$

but customers are not swayed by the marketing efforts and the sales mix remains what it was in Question $4.$

Calculate the sales of Beverages in TL that would be necessary to achieve the desired target net income. Q$-7)$ Company $x$ process materials extracted from mines. The most common raw material that it processes results in

three joint products; Product A$,$ Product B and Product C$.$ Each of these products can be sold as is$,$ or each can

be processed further and sold for a higher price. The company incurs joint costs of TL$180,000$ to process one batch

of the raw material that produces the three joint products. Company allocates joint costs to products based on

tonnage of the product. The following cost and sales information is available for one batch of each product:

Determine total net income after deciding which products should be sold at the split$-$off point and which should be

processed further using incremental analysis.

Q$-8)$ Company $x$ has an existing machine which is straight line depreciated to process its invoices. Following

information pertains to this machine.

The company is considering replacing this machine with a new one. New machine will cost TL$130,000$ and will

have $3$ years useful life. Per annum operating costs of the new machine are TL$80,080.$

Determine if the company should retain or replace the existing machine ignoring the time value of money. Note

enter $1$ if the machine is retained, enter $2$ if the machine is replaced. Use below information for Questions $9$ to $10$ :

Company X operates a small factory in which it manufactures two products: C and D$.$ Production and sales results for

last year were as follows:

For purposes of simplicity, the firm averages total fixed costs over the total number of units produced. The research

department has developed a new product $($E$)$ as a replacement for product D$.$ Market studies show that the firm could

sell $10,000$ units of E next year at a price of TL$118.$ The variable cost per unit of E is TL$43.$ The introduction of E will

lead to a $13\%$ increase in demand for product $C$ and discontinuation of product $D.$ If the company does not introduce

the new product, it expects next year's results to be the same as last year's.

Q$-9)$ Calculate net income for the next year if the company does not introduce product E$.$

Q$-10)$ Calculate net income for the next year if the company introduces product E$.$