2.2 Merry Motors specializes in the manufacture of small capacity motors. The following information is available for the forthcoming year:

	R
Selling price per unit	2 400
Variable cost per unit	1 800
Total fixed costs	48 000

The expected sales volume is 200 units.

Required:

2.2.1 Calculate the number of units that must be sold in order to make a profit of R50 000 (answer rounded off to the nearest whole number). (5)

2.2.2 The manager of Merry Motors wants to increase sales by 25 units with the following proposal:

Would you approve of the managers proposal? Motivate your answer by showing the effect it would have on the profit of Merry Motors. (5)