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Question 2: Plaistead Plc Plaistead Plc makes electric kettles that they currently sell at 13 each. The management of the company believes that the company*s equipment could currently produce up to 70,0 00 units of electric kettles per year. However, the budget for the coming year is 53,000 units of electric kettles and costs are estimated as follows: W1 Materials 5.25 Labour 2.95 Variable overheads 1.35 Fixed costs: Production 59,000 Selling etc. 417,600 Required: 3. What is the contribution that each electric kettle makes towards covering xed costs if it is sold for 13? [2 marks] I1. What is the break-even point and margin of safety in terms of both units and revenue if each electric kettle is sold for 13? [5 marks] c. Calculate the prot Plaistead Plc makes if it produces and sells 53,000 electric kettles at 13 per kettle. [Il- marks] :1. If Plaistead Plc wants to make 90,000 prot how many electric kettles will they need to make and sell, if the selling price is 13 per electric kettle? [Ii- marks] e. At what price would Plaistead Plc have had to sell 53,000 electric kettles to make a prot of 90,000? [4- marks] I. Plaistead Plc is considering whether to spend 45,000 on marketing and advertising but consequently raising the selling price by 9%. At this new sales price and with the advertising sales [in units of electric kettles) will increase by 1?%. Analyse whether this is a good strategy for Plaistead Plc? [7 marks] 3. Briey discuss the underpinning assumptions attached to the break-even model. [Tmarks]