Freddie makes three types of cakes: butter, fruity and sponge. Current Sales butter (200,000 at 50p) fruity (400,000 at 40p) sponge (800,000 at 20p) 100,000 160,000 160,000 420,000 Less: Costs Direct materials Direct labour Variable overheads Fixed overheads Total Costs Net Profit 100,000 80,000 40,000 20,000 240,000 180,000 The variable costs are split: 50% to butter, 25% to fruity and 25% to sponge. You are required to: (5 marks) Are all these products profitable? If not what is the effect on profit of dropping the unprofitable products? (Total 25