Question 2 A computer game developer has designed two new games with a software house, The Football Stimulator and The Cricket Stimulator. They are planning to launch the new games in the local and international market in the coming year. As there are limited resources only one of the two games can be launched now. Both the games use the same production facilities. The following data are the best estimates the firm has been able to obtain on the games: Football simulator Cricket simulator Expected Annual sales volume (units) 40 000 30 000 Selling price RM130 per unit RM200 per unit Variable production costs RM80 per unit RM100 per unit Fixed production costs RM600 000 RM600 000 Fixed selling and administrative costs RM450 000 RM1350 000 The higher selling and administrative costs for the cricket simulator reflect the additional advertising and promotion costs expected to be necessary to sell the more expensive cricket system. The firm has a minimum target of RM200 000 profit per year for each of the new product. a. c. Compute the following: Contribution per unit for each product. (2 marks) b. Breakeven in units and (RM) for each product. (6 marks) Compute Margin of Safety as a percentage of sales based on the expected Sales Volume for each product. (4 marks) d. Expected profit from each product from the expected sales volume. (6 marks) The number of units to be sold in order to achieve the target profit for each product. (4 marks) f. Based on the calculations above, recommend the product that should be produced and launched. e. (3 marks) (25 marks)