5 (20 MARKS) Fairyland Pottery is a new entrant in the market for premium range of vases. As a school break is approaching in which the demand for wedding door gifts is increasing, the company is evaluating its production and sales for the past two months. The company's income statement for this two months show the costs and productive efficiency and the cost information is as follows: 2,000 vases Production (units) 4,000 vases RM RM Administration 8,000.00 8,000.00 Direct labour 30,000.00 50,000.00 Direct materials Electricity Factory supplies Indirect labour Power Rental Selling and distribution 60,000.00 100,000.00 1,000.00 1,000.00 3,000.00 5,000.00 13,000.00 19,000.00 1,600.00 2,000.00 2,800.00 2,800.00 9,000.00 13,000.00 Additional information is available: The normal production and sales is 2,000 vases per month with a maximum capacity of 5,000 vases. The average selling price of each vase is RM150.00. REQUIRED: a. Determine the break-even point (in units and in sales value). [4 Marks] b. Determine the new selling price for the company to break-even if it can only sell 1,500 vases per month. [2 Marks] c. Based on (a), compute the expected net profit at a sales level of 5,000 vases when an additional commission of RM1.00 per vase is introduced after the break-even point. [4 Marks] d. The company marketing team predict that if the selling price is reduced by RM1.50 per vases and a RM50,000.00 advertising campaign is mounted, sales will increase by 20% over the next period. Compute the revenues earned if the management proceed with the proposed plan. Should the management continues with the proposed plan? [5 Marks] e. The company is planning to introduce a new product line, a serving bowl of which, the selling price and a variable cost of RM95.00 and RM35.00 respectively. The proposal sales mix is 40% for the vases and 60% for the serving bowl. The introduction of this new product line will increase the total fixed costs by RM10,500.00. Compute the break-even point (in units and in sales value). [5 Marks]