Jabu manufactures and sells Product X. During the most recent financial period, he sold 500 units at R750 each. There were no units of Product X in opening or closing inventory. Sales people are paid a commission of 5% on sales. The following additional information is available for this sales level:

Fixed administrative cost per unit R90.00

Total fixed manufacturing overhead R120 000

Total fixed marketing cost R50 000

Direct material usage per product 2 kg

Direct material price per kilogram R14.50

Total direct labour cost R47 500

Required:

1. Refer to (c) above. Do you think that it is viable for Jabu to launch the advertising campaign? (10 Marks)