a) Sticky Bun Ltd has provided the following information in respect of April 2016. Budgeted number of units: 70,000 units Sales revenue (S) (s) 1,050,000 Less Variable costs of sale (V) Contribution (C) Less: Fixed costs (F) Profit (P) The directors of the company are considering the following two options: 730,000 320,000 245,000 75,000 1. Improve product quality by using a higher-grade material. This will increase variable cost of the unit by 1.00 but will have no effect on sales volume. 2. Increase spending on advertising and promotion. This will increase fixed cost by 50,000. It has been estimated that this will increase sales volume by 25%. Use marginal costing method to solve for the given two options by using the information provided. Option 1 calculations Option 2 calculations [5 marks] [5 marks] b) You are required to advise the board of which option should be adopted by giving your reasons for it. [2 marks]