The Company Black Crop. has the following profit and loss account: Sales. 11.000 Direct materials 4500 LAbor 2500 Depreciation 1200 Utilities 400 Rental cost 1000 Commissions 110Transportation cost 110 Ebit 1180. The CEO of the company has hired you as consultant to support him in his management decisions regarding prices and volumes. As you want to make proper analysis so decide to make a revised income statement that employs a contribution margin format that will be useful in CVP Analysis. For this purpose, you ask for additional information which is the split of the accounts: Labor 2500 Direct 1500 Plant manager 375 Sales and admin 625 Depreciation 1200 Direct machinery 600 Indirect installation 360 Office furniture 240 Utilities 400 Plant 320 Offices 80 Rental cost 1000 office 600 plant 400 a Prepare the revised income statement and explain which of the cost lines is variable or fixed costs and why. (25 points) b) Which is the contribution margin of the company? (5 points) c) What number of units must the company sell for break-even (5 points) d) What is the sales figure that the company need to achieve if the want to have an EBIT of 500? (5 points) e) What would be the EBIT if the company reduces salaries in 10% and increases sales in 10%? (5 points) f)The company receives a proposal of a customer that wants to buy 3000 units at a price discount of 25%. In this case this sale would not affect our traditional customers, they would not notice. Should we accept the order if we do not have capacity constrains? (5 points) g) What are the dangers of using CVP analysis? (5 points) Would a lawyer use job costing or process costing ? Why?.

1. The Company database attaches each Dependent to exactly one Employee. Suppose we want to
change this relationship to allow each Dependent to be optionally be tied to more than one
Employee. How would we need to modify the design for this? The current design of Dependent
is: ESSN, dependent_name, sex, bdate, relationship, where the key is the pair (ESSN,
dependent_name), and ESSN is also a foreign key referencing the Employee table Add another
column ESSN2 for a 2nd employee. This is also a foreign key to Employee Remove ESSN from
the Dependent table -- make dependent_name the new primary key. Create a new table with
ESSN and dependent_name, with the primary key being both attributes and ESSN a foreign key
to Employee and dependent_name a foreign key to Dependent. Change the type of ESSN to be
an array. The primary key is still the combination of ESSN and dependent_name, and ESSN is
still a foreign key to the Employee table No change to the design is necessary Clear my selection