(a) Peppermint Sdn Bhd has fixed costs of RM46,000 and variable costs that are 30 percent of the current sales price of RM2.15. At a price of RM2.15, Peppermint sells 40,000 units. Peppermint can increase sales by 10,000 units by cutting its unit price from RM2.15 to RM1.95, but the variable cost per unit wont change. Should it cut its price?

iii. Find the change in EBIT and indicate whether Peppermint should cut its price. (4 marks)