Question 3 (30 points) Campster Ltd produces and sells camping equipment to tourists and local buyers and has prepared the following flexed budget for 2022. Production capacity 60% 80% 100% Costs: N'000 N'000 N'000 Direct labour 48,000 64.000 80,000 Direct material 36,000 48,000 60.000 Production overheads 25,200 27,600 30.000 Administrative overheads 12,400 13.200 14.000 Selling and distribution overheads 13,600 14,800 16.000 The company currently operates at 60% capacity with sales of N120,000,000, which is a loss-making position. Market predictions indicate a rise in tourism in the coming years which is expected to improve sales. The company projects that production level for 2018 would be 75% with sales of N150,000,000 The Directors also have the option to shut down production for a year to see if business conditions improve. This option has the following consequences: i. All fixed cost would be reduced by 50%. ii. Redundancy payoffs would amount to N3,000,000. ii. Reopening cost is estimated at N2,000,000. Required: a) Prepare the flexed budget for 75% production capacity. b) Make a recommendation to the Directors on whether to operate or shut down the factory in 2022