Matilda Manufacturers makes lounge chairs. The following information was extracted from the budget for the year ended 30 November 2019:

Estimated sales for the financial year	4 000 units
Selling price per unit	R1 200
Direct materials cost per unit	R420
Direct labour cost per unit	R210
Variable production overheads cos per unit	R120
Fixed production overheads	R360 000
Selling and administrative expenses:
Fixed	R180 000
Variable	R90 per unit

Required: 1.1 Calculate the break-even value by using the contribution margin ratio. (6) 1.2 Calculate the margin of safety (in terms of units). (4) 1.3 Calculate the number of units that need to be sold in order to achieve an operating profit of R1 260 000. (4) 1.4 Determine the additional amount that the manufacturer can spend on salaries and realise an operating profit of R600 000. (5) 1.5 Suppose Matilda Manufacturers wants to implement a 10% drop in the selling price per unit accompanied by a R40 000 increase in advertising expense with the expectation that sales volume will increase by 900 units. Will profitability improve? Motivate your answer with the relevant calculations.