A company is considering manufacturing solar panel batteries and produce 50,000 of them this year regardless of demand. The variable costs are forecast to be 45 Labour Material Variable overheads 85 30 Fixed costs are budgeted as 1,375,000. The company are considering setting prices equal to full cost plus a mark-up of 20%. However, market research information has revealed that demand could vary with price in the following way Price per solar panel Demand in units 205 215 225 235 46,000 42,000 39,000 35,000 245 29,000 You are required to: a) Prepare two profit statements for the year when cost plus pricing is used; prepare one using marginal costing and one using absorption costing. b) Calculate the price that yields the maximum contribution if a profit maximizing approach is used. c) Discuss the reasons for, and criticisms of, cost plus pricing