6 Menlo Company manufactures and sells a single product. The following information has been provided to you: Profit and loss account for the year ended 31 Dec 2017: Profit Sales Production costs: Direct materials 300,000 Direct labour 1,387,500 Variable overhead 150,000 Fixed overhead 525,000 Total production costs: Fixed administration overhead Selling distribution costs: Sales and commission 60,000 (2% of sales) 2,362,500 240,000 3,000,000 Variable distribution 127,500 costs Fixed costs advertising 90.000 277,500 2,880,000 Profit 120,000 The company sold 150,000 units last year at a selling price of 20.00 per unit. Required: As the company's newly appointed management accountant, you are asked to calculate: (a) Total contribution for 2017. (4 Marks) (b) Break-even point in units. (7 Marks) (c) The number of units the company would have to sell to make a net profit of 180,000. (3 Marks) (d) The effect on breakeven point if the company had to reduce the selling price by 15%. (3 Marks) (e) The company is considering changing one of their component parts which will increase the unit variable cost by 2.25. If they hold the selling price constant per unit and make the proposed changes to the variable costs, calculate the number of units that must be sold to breakeven. (3Marks) (f) What is meant by a product's contribution margin (CM) ratio? How is this ratio useful in planning business operations