ACCSZTIACCSZZl - Performance Management Week 5 - BL Question Topic 2.1 - Short-term Decision Making Technique 9m AX Co. produces and sells one product and its forecast for the next nancial year is as follows; $'000 $'000 Sales 100,000 units @ $3 300 Variable costs: Material 300 Labor E E Contribution ($3 per unit) 300 Fixed Costs Net Prot 150 As an attempt to increase net prot, two proposals have been put forward: a) To launch an advertising campaign costing $14,000. This will increase the sales to 150,000 units, although the price will have to be reduced to $7. b) To produce some components at present purchased from suppliers. This will reduce material costs by 20% but will increase xed costs by $72,000. Required: Analyze both the proposals