Question 2: The Grand root company has provided the following operating statement of the latest financial year. Sales (22,000 units) Direct materials Direct labour Producti on ov erheads Gross Profit Selling overheads Net Profit Amount (In t) 726,000 32742000 7298,000 Amount (In 2) 33.002000 The variable production overheads were t9 per unit while the variable selling overheads were 11 per unit. Answer the following questions 1. Calculate the Point (in units) and the margin of safety in units for the latest financial year. [4 Marks] 2. The company has a capacity of 30,000 units per year. Management is not happy with the financial performance for the last year: and two courses of action for the coming year were proposed in the recent management meeting. a) The sales manager believed that unit volume would increase by 30% with the Incurrence of 000,000 on advertising. b) The general manager considered that ftll capacity could be reached if the selling price were cut by 10%. In addition: the direct material cost would be reduced by 5% following a minor modification of the specification of the product Which alternative will lead to a higher net income for the commg Answer this question by preparmg the income statements using a contribution margm approach. [4 Marks]