1. Determine the margin of safety units for Macro Hardware Limited in the financial year ending 30 June 2022 assuming the expected sales mix remains constant.

2. Prepare a performance budget for the laptops and iPods manufactured by Macro Hardware Limited and for the business for the financial year ending 30 June 2022 using the absorption costing method.

Macro Hardware Limited manufactures two types of products, a laptop and an iPod and sells them in a very competitive market. Both products are funky light-weight products that are designed for the 15- to 25-year-old age group market. Due to the popularity of their products, Macro Hardware Limited is considering expanding into different target markets during the next financial year that commences on 1 July 2022. However, management wish to first evaluate the risk and expected profitability of the existing target market for 2022 before embarking on these new endeavours. Management has requested that the financial accountant collect all the relevant financial information relating to the two products for the 2022 financial year and prepare a budget for them for 2022. The financial accountant is not sure how to allocate some of the cost between the two products, but all the other relevant budget information relating to the two products for the financial year ending 30 June 2022 is summarised in the table below (note that this is summarised on a per unit basis): Financial information for the 30 June 2019 financial year Selling price Direct materials Direct labour (R160 per hour) Variable marketing and distribution costs Fixed marketing and distribution costs Actual production and sales in units Laptop R15 000 R4 500 R1 920 R800 R600 900 iPod R2 000 R400 R320 R200 R100 2 700 . Macro Hardware Limited adopted just-in-time method and does not keep inventory of laptops or iPods. Also, there is no opening or closing work-in-progress or raw materials for both products. Direct labourers used in the manufacturing of the products signed fixed-term contracts with the company so that they can be paid for both idle and production hours. Labourers were operating at full capacity during the 30 June 2022 financial year hence the possible expansion need. Fixed marketing and distribution costs have been allocated to units based on actual sales volume that were sold during the 2022 financial year. The laptop and iPod prices are dictated by the market and Macro Hardware Limited does not have much room to increase the selling prices. The expected production and sales in units for the 30 June 2023 financial year is as follows: Laptop Budget information for the 30 June 2023 financial year Expected production and sales in units iPod 2 400 800 The total fixed manufacturing overheads costs for the 2022 financial year was R7 650 000 and it is expected to remain the same in the 2023 financial year. Fixed manufacturing overhead costs are currently allocated to production based on the number of direct labour hours