Question 2(b) A summary of a manufacturing company's profit statement for its financial year just ended is given below, when the company was operating at 80% of capacity. 840 000 Sales Revenue (12.000 units) Less: Direct Materials Direct Labour (wages) Production Overhead Fixed Variable 96.000 120.000 124.000 24,000 364 000 476 000 Gross Profit Administration, Selling & Distribution Costs Fixed Varying with sales volume 64.000 36.000 100.000 376.000 Net Profit Materials and labour vary directly with volume of production and all units produced by the company are sold. Required: i. What was the break-even point in units and in revenue () last year? (3 marks) ii. What was the margin of safety as a percentage (%) of sales last year? (2 marks) iii. If the company's target profit was 347,800 how many more units did it produce and sell than it anticipated last year? (3 marks) (3 marks) ii. What was the margin of safety as a percentage (%) of sales last year? (2 marks) iii. If the company's target profit was 347,800 how many more units did it produce and sell than it anticipated last year? (3 marks) iiii. For the forthcoming financial year, the company intends to either: a. Reduce selling price per unit by 10% which will allow it to produce and sell at full operating capacity b. Keep selling price per unit as it is but spend an additional 30,000 per annum on an advertising campaign, which will allow production and sales to be at 90% of operating capacity. Required From a financial perspective, what would your advice to the company be on the option to adopt? Show clearly your workings to support your answer. (7 marks) (Total: 25 marks)