As noted in C3 and C4, Datura, Ltd., sold 15,000 sets of pottery in 2014. For the next year, 2015,..

As noted in C3 and C4, Datura, Ltd., sold 15,000 sets of pottery in 2014. For the next year, 2015, Datura’s strategic planning team targeted sales of 15,000 sets of pottery, reduced the selling price to €890 per set, increased sales commissions to 12 percent of the selling price, and decreased fixed distribution costs by 10 percent and variable distribution costs by 4 percent. It was assumed that all other costs would stay the same. In Q C3, Based in Italy, Datura, Ltd., is an international importer-exporter of pottery with distribution centers in the United States, Europe, and Australia. The company was very successful in its early years, but its profitability has since declined. As a member of a management team selected to gather information for Datura’s next strategic planning meeting, you have been asked to review its most recent contribution margin income statement for the year ended December 31, 2014, which follows. In Q C4, Refer to the information in C3. In January 2015, the president of Datura, Ltd., conducted a strategic planning meeting. During the meeting, the vice president of distribution noted that because of a new contract with an international shipping line, the company’s fixed distribution costs for 2015 would be reduced by 10 percent and its variable distribution costs by 4 percent. The vice president of sales offered the following information: We plan to sell 15,000 sets of pottery again in 2015, but based on review of the competition, we are goin