G. Fan Limited, an indigenous Ghanaian company manufactures and sells celling fans. After its first year of operation, management decided to review it activities in order to plan well for the future. The firms goal is to create value for its shareholders. In order to create value, it need to maintain sustainable profits which will enhance earnings per share (EPS) and in turn increase the share price. To achieve its goal, management decided to use the enhance revenue and reduce cost approach. Sir George, the management accountant and Ms. Tuffour, the marketing/sales manager have been tasked to review the cost and sales of the company. In the next management meeting, Ms. Tuffour presented a strategy to enhance revenue. She mentioned that a market research conducted revealed that the low-price strategy was effective in the industry and really boosted sales. On average a 5 percent reduction in price lead to a 10 percent increase in sales. In addition, she presented three new advertising campaigns that will result in a 10 percent increase in advertising cost if implemented. Per her analysis, reducing the price and intensively marketing the fans will increase the sales level of the company by 20 percent. Immediately, Sir George wondered if the 20 percent increase in sales will be enough to justify the increased advertising cost and offset the loss in revenue from the lower price. He suggested that Ms. Tuffours proposal needed to be subjected to further analysis to assess the impact on profit. He added that he could present his answers as well as a model at their next meeting. In preparation for his presentation at the next management meeting, Sir George reviewed all the costs involved in production, sale (current and proposed) and management of the business. Afterwards he examined the effect of changes in demand on the costs identified. As a good manager he had to anticipate which cost will change and by how much the cost will change in order to confidently estimate the costs for any quantity of fan sold. He then went ahead to assess the relationship between prices, costs and volume. After various analysis he clearly saw the impact the marketing managers suggestion would have on the firms profits. Questions a. List any ten possible costs Sir George found when reviewing the costs of the firm. b. As a good manager he had to anticipate which cost will change and by how much the cost will change in order to confidently estimate the costs for any quantity of fans sold. Per this statement, how would Sir George classify costs and classify the costs listed in (a). c. Mention and explain three profit planning analysis Sir George performed to assess the impact of Ms. Tuffuors suggestion.