DG Company manufactures air compressors and the company has supplied you with the following budgeted data regarding one of the air compressors: Variable cost per unit RM Direct materials 180 Direct labour 150 Variable overheads 90 720 The draft budget for the following year is as follows: 500 units Production and sales Fixed costs: Production overhead Administration expense Selling and distribution expense Contribution RM 80,000 45,000 64.000 270,000 During the recent management meeting the following options have been discussed: (1) The sales manager has suggested that if the selling price was reduced by 10%, then an extra 27% unit could be sold. The purchasing manager has indicated that if materials requirements were increased in line, then a materials price reduction of 5% could be negotiated. With this additional output, fixed production costs would increase by RM20.000: administration by RM8.000; and selling and distribution by RM5,000. Other costs would remain unchanged. (2) The marketing manager has suggested that if the company increased marketing promotion expenses by RM35.000 then exports sales would increase from 300 units to 450 units. With this suggestion, distribution costs would increase by RM7.000 and all other costs would remain unchanged. The managing director believes the company should be aiming for a profit of RM260.000. He asks what the selling price would be per unit if marketing expenses were increased by RM40.000, this leading to an estimated increase in sales quantity of 35%. Production fixed costs would increase by RM47.220. whilst material prices would decrease by 8% per unit. All other costs would remain unchanged. REQUIRED: Taking each suggestion independently, compile a profit statement (a) original budget and 6) option (1) to (3), showing clearly the net profit and contribution per unit in each case. For option (3), calculate the selling price per unit as requested by the managing director. Calculate the break-even quantity for original budget and each of the option (1) to (3) (11)