Null Ltd produces four products, A, B, C, and D. The budget for the next year shows the following results: S000 A B D Total Sales 700 400 250 340 1,690 210 60 30 40 340 100 200 200 200 700 Material Labour Variable overhead Fixed overhead 90 60 50 50 250 20 40 40 40 140 280 40 10 260 Profit/Loss Sales (units) (70) 25 140 20 20 The directors are worried about C and the loss that it appears to make. The following suggestions hi been put forward to improve the situation: 1 To cease production and sales of C. 2 To increase the selling price of C by 20%; this would decrease the sales volume by 10%. 3 To decrease the selling price of C by 10%; this would increase the sales volume by 10%. 4 To reduce the labour costs of C by $100,000, by purchasing a new machine which would or $350,000, and have a life of five years and no residual value. The selling price and other variable co per unit would remain the same 1 To cease production and sales of C. 2 To increase the selling price of C by 20%; this would decrease the sales volume by 10%. 3 To decrease the selling price of C by 10%; this would increase the sales volume by 10%. 4 To reduce the labour costs of C by $100,000, by purchasing a new machine which would cost $350,000, and have a life of five years and no residual value. The selling price and other variable costs per unit would remain the same. Required: (a) Evaluate each of the four proposals above individually, by calculating the effect on the budgeted profit of implementing the suggestions. (6 marks for each) (b) Suggest the best course of action for the company to follow. (1 mark) (Total 25 marks)