0 Less:Admin& 4.50 81,000 27,000 4.50 54,000 162,000 Sellin- costs 63.000 39.000 54.000 78.000 _------ reuired Productive capacity is 87,000 machine hours but the expected sales would only require 74,400 hours practical capacity, so 12,600 machine hours will not be used. It was discovered that: - direct materials and direct labor are variable costs 0 production overhead has a 5 per cent variable element - each product has a variable selling element of 0.50 0 fixed administration and selling costs are 144,000. Required: a) Determine the variable cost and contribution per unit for each product, and the total budgeted fixed cost for the company for the next month. b) Show the budgeted profits for the year using a contribution format. c) Calculate the effect on net profit if an additional 4,000 units of product C were produced and sold but required an additional fixed marketing cost of 10,000 for the month. d) The above analysis shows that product B is making a loss. Discuss whether its production should be discontinued