Namibia Cellars (NC) is a large whiskey manufacturer based in Southern Namibia. Their whiskies are considered world class by many enthusiasts, and are therefore mainly sold to export markets. They are currently producing three whiskies, namely the 5 year, 10 year and 15 year. The names corresponds to the years that each type is required to mature. The whiskies are produced by distilling A-grade wine and ageing them in oak barrels. After the ageing process is completed, the whiskies are bottled in one litre bottles and sold to the export markets. The following information for the three products was compiled by the costing department and applies to the 2021 year: Page 12 of 16 5 year 10 year 15 year Sales mix in units 60% 30% 10% Sales price N$250 N$700 N$1 300 Export cost per bottle N$50 N$115 N$325 Litres of A-grade wine required per bottle 1 3 5 Direct labour hours required per bottle 2 8 15 Machine hours required per bottle 10 50 100 A-grade wine N$40 per litre Direct labour per hour N$10 International liquor license per year N$450 000 As part of the ageing process, the whiskies have to be heated and cooled at critical times. This is performed automatically by advanced machinery. NC's electricity expense is directly related to the amount of hours that these machines are operated. Electricity costs were as follows at the given activity levels: Machine hours 70 000 95 000 120 000 Electricity costs N$290 000 N$340 000 N$390 000 It can be assumed that fixed costs remain constant for the entire relevant range of production. The maximum demand for the company's products per year is 2 500 bottles of 5 year, 1 000 bottles of 10 year and 1 200 bottles of 15 year. The tax rate is 32%. Requirement Mark Subtotal Total 2.1 Calculate the break-even point in units for every type of whiskey if the current sales mix is maintained. 15 15 2.2 If there are only 7 500 litres of A-grade wine available, determine the sales mix in bottles that will maximise the profit. 6 21 2.3 Calculate the net profit to be earned at the sales mix as calculated in (2.2) above. 3 24 2.4 NC wants to appoint an agent that earns a commission of N$10 per bottle for the 5 year type, N$15 for the 10 year and N$25 for the 15 year type, as well as a fixed fee of N$54 500 per year. Calculate the break-even point in units for every type of whiskey if the agent is appointed, and the original sales mix is applied.