Question 3 120 a) Briefly explain 2 assumptions of the breakeven analysis. [4 marks] b) You are presented with the following budgeted information of Classic Traders for the year to 31" December 2015: '000 Fixed Costs Rent 180 Water 50 Electricity Total Variable Cost 700 Total Budgeted Sales Revenue 1400 Classic Traders has budgeted to produce and sell 70,000 units during the year 2015. Required: Calculate the following: i. The breakeven point in units and value (). [4 marks) ii. The margin of safety in units, in value and as a percentage of budgeted sales. [4 marks) iii. Assume that only 60,000 units were sold during the year 2014. Calculate Classic Traders' net profit or loss. [4 marks] iv. If a selling commission of 1 per unit sold was to be introduced in 2015, how many units would need to be sold in order to earn a net profit of 200,000? [4 marks)