Jasmine currently manufactures three types of radio-controlled boats: standard, advanced and deluxe Budgeted fixed costs for the year ahead are 250,000. While standard and advanced boats will be produced at near full manufacturing capacity, there is plenty of spare productive capacity in terms of deluxe The following data shows the budgeted selling prices and volumes together with variable costs per unit for each of the models. Sales Volume Standard Advanced Deluxe 6,400 4,200 780 Selling Price 150 210 480 Direct Materials 40 60 130 Direct Labour Variable Overheads 25 25 80 25 30 50 Before the start of the year ahead, and the need to finalise planned production of the three boats, the directors are informed the Deluxe model has not been selling well. It is thought to be too expensive in the current market. Jasmine has now two new choices: 1. to drop the selling price of the Deluxe model by 60, which market research indicates will increase the sales by 40%; or 2. to drop the Deluxe model from their range. The labour which is currently used on the Deluxe model could then be transferred to increase the production of the Standard or Advanced model, or of both models equally. Further information Assume that all production is sold. Any change in production of the Deluxe model incurs no new productive capacity or period cost. Any increase in production of either the Standard or the Advanced modelincurs extra fixed costs of 30,000 iv. Any increase in production of either the Standard or the Advanced would require no changes to their variable cost per unit. a. Prepare a table showing the unit and total contributions as well as the c. Contribution analysis is often used to evaluate a one off contractor order. Discuss the advantages as well as the disadvantages of using contribution analysis in such a scenario. (The word count for this question is 200 words.) (5 marks) d. Explain what is meant by sensitivity analysis in contribution analysis and state the advantages in using such a technique. (The word count for this question is 100 words.)