Cottage Industries Ltd makes baskets. The fixed costs of operating the workshop for a month total $1,500. Each basket requires materials which cost $6. Each basket takes two hours to make and the business pays the basket- makers $9 an hour. The basketmakers are all on contracts that specify that if they do not work, for any reason, they are not paid. The baskets are sold to a wholesaler for $30 each. In addition, there is a fixed handling fee to all the wholesaler of $55. a) Break-even graph (i) What is the break-even number of orders? (4 marks) (ii) What is the corresponding break-even revenue? (1 mark) (iii) Draw a Break-even graph using EXCEL. Present appropriate calculations plus a copy of your EXCEL graph. Indicate on your graph the region corresponding to profits and the region corresponding to losses. (8 marks) EXCEL Instructions to produce a break-even graph: Create a column called Number of orders and in that column enter values from 0 to 400 in increments of 20. Then create two more columns, one for Total Cost and another for Total Revenue. Enter appropriate formulae in EXCEL to obtain the total cost and total revenue corresponding to each value in the Number of units column. Highlight the resulting three sets of numbers and go to Insert Charts Scatter to obtain a graph. Make sure that your graph has been labelled appropriately (i.e. title, axis labels, legend) and that your chart title includes your student ID. Refer to Topic 3 in the EXCEL Booklet for further instructions on entering formulae and graphing in EXCEL. Cottage Industries Ltd expects to sell 500 baskets a month. The business has the opportunity to rent a basket- making machine. Doing so would increase the total fixed costs of operating the workshop for a month to $6,000. Using the machine would reduce the labour time to one hour per basket. The basket-makers would still be paid $9 an hour. b) How much profit would the business make each month from selling baskets: (i) Assuming the bussuness doest not rent the basket-making machine? (2 marks) (ii) Assuming that it is rented? (2 marks) c) What is the break-even point if the machine is rented? (2 marks) d) What do you notice about the figures you calculated? (2 marks)