Ventana Inc. sells a single product for $47. Its management estimates the following revenues and costs for the year 2020:

Net Sales

Direct Materials

Direct Labour

Mfg Overhead - Variable Mfg Overhead - Fixed

Required:

$625,000 Selling expenses - Variable 82,000 Selling expenses - Fixed 76,000 Admin expenses - Variable 34,000 Admin expenses - Fixed 26,000

$18,000 21,800 3,400 2,500

1. 1Assuming fixed costs and net sales are spread evenly throughout the year, determine Ventana's monthly break-even point in (a) units and (b) dollars.
2. 2Calculate the contribution margin ratio, the annual margin of safety ratio, and the annual profit
3. 3Determine the percentage increase of annual profits if Ventana Inc. increases its selling price by 25% and all other factors (including demand) remain constant.
4. 4Assume the price remains at $47 per unit and variable costs remain the same per unit, but fixed costs increase by 14% annually. Calculate the percentage increase in unit sales required to achieve the same level of annual profit calculated in required # 2
5. 5Determine the sales required to earn an operating income of $370,000 after tax. Ventana Inc.'s income tax is 25%.