2 A. Seri Bella Bhd is a company engaged solely in manufacturing of kids' apparel. In recent years, there has been a steady decline in sales volume because of foreign competition. In year 2021, the accounting report indicated that the company produced the lowest profit for the past 10 years. The following are the details: Seri Bella Bhd Statement of Profit and Loss and Other Comprehensive Income For The Year Ended 31 December 2021 Sales revenue Direct materials Direct labour Variable production overhead Fixed production overhead Gross profit Administration overhead Sales commission Delivery costs Selling overhead Net Profit Additional information: The selling price is RM35 per unit. RM RM 630,000 225,000 162,000 5,400 95,000 (487,400) 142,600 83,000 12,600 7,200 30,400 (133,200) 9,400 Sales commissions are calculated based on 2% from the sales value. Delivery costs varies with the sales volume. Administration and selling overhead are constant throughout the year. The forecast for year 2022 indicates that the present deterioration in profits is likely to continue. The company considers that a profit of RM25,000 should be achieved to provide an adequate return on capital. The managing director has asked for a review to be made on the present pricing and marketing policies. The marketing director has completed his review and passes to you the following proposals for evaluation and recommendation. Proposal A To proceed based on market research studies which indicate that the demand for the apparel is such, that a 10% reduction in selling price would increase demand by 55%. Proposal B To proceed based on a view by the marketing director that a 10% price reduction, together with a national advertising campaign costing RM20,000 may increase sales to the maximum capacity of 30,000 units. Required: i. ii. iii. Calculate the break-even point in units and sales value of the company for the year 2021. (4 marks) Evaluate the best alternative for the company based on the new break-even point of the two proposals. (4 marks) Explain briefly whether the company can achieve the desired profit if they proceed with the decision in (ii). (Show all calculations) (2 marks)