MANAGEMENT ACCOUNTING AND CONTROL (AFU 08103) BA-3 2022 11) A manufacturer is considering a new product which could be produced in one of two qualities: Standard or De Luxe. The following estimates have been made: Standard De Luxe TZS TZS Unit labour cost 2.00 2.50 Unit material cost 1.50 2.00 Unit parking cost 1.00 2.00 Proposed selling price per unit 7.00 10.00 Budgeted fixed cost per period: 0-99,999 200,000 250,000 100,000 and above 350,000 400,000 At the proposed selling prices, market research indicates the following demand: Standard Quantity Probability 172,000 0.1 160,000 0.7 148,000 0.2 De Luxe Quantity Probability 195,500 0.3 156,500 0.5 109,500 0.2 You are required: a) Compute BEP for each quality; b) To calculate, for each quality, the expected unit sales, expected profits and the margin of safety c) Using an appropriate measure of risk, to advise management which quality should be launched.