Question 2 (50 marks) PRO Limited produces and sells a single product A. The selling price of product A is $315 per unit. The costs to produce and sell the product are as follows: Variable costs per unit: Material costs $135 Labour costs 210 Fixed costs per year: Manufacturing overhead $500,000 Fixed salary costs 45,000 Advertising costs 70,000 615,000 75 Required: 1 PRO Limited's target operating income is $318,350 per month. Compute the unit of product A it must sell per month to achieve the target. (12 marks) 2 PRO Limited is planning to improve profitability by cutting costs. The management is considering between two options: i Reduce labour costs by $1 per unit ii Reduce fixed salary costs by $6,000 per year Assume the units sold remain unchanged from the number obtained in requirement (1), calculate the operating income per month for each plan to show which plan should be chosen. (18 marks) 3 PRO Limited is developing a new product B to sell in bundle with the existing product. The selling price of the product will be $500, and the variable costs will be $320 per unit. In addition, a fixed cost of $438.000 per year is required to produce the new product. The sales mix of product A:B is expected to be 3:2. Calculate the breakeven sales in unit per year for both products. (Note: the plans in requirement (2) are not implemented.) (20 marks)