Instruction to Candidates: Candidates must answer any 4 question QUESTION ONE Life support produces a single health bar product which sells for MVRM4.00. The variable costs for each bar totals MVR2.50. The total monthly fixed costs are MVR600,000. During December 2018, 1.5 million bars were sold. The managing director of Life support was not satisfied with its performance and is considering the following two options to improve profitability: Option 1: Option 2: Required: Increase advertising costs. Improve the quality of the bar and increase the selling price. a. Calculate Life support's current break-even point and margin of safety. b. [8 marks] If option 1 is taken, the sales manager is confident that an intensive advertising campaign wills double the sales volume. If the company's Managing Director want to achieve a 50% increase profits over last month's, what is the maximum amount that can be spent on advertising that will double the sales volume? [12 marks] c. If the Managing Director chooses option 2, then the variable cost per bar is expected to increase to MVR3. How much must the selling price be increased to maintain the same break-even point