Question 3 EFF Analysis It] marks Manchester LTlIJI manufactures FIFA computer games. Last year Manchester sold sooo games at $500 each. The variable cost of each game was 5300, and the turns xed cost amounted to $500,000 per year. In an attempt to improve its product, the company is considering replacing a component part that has a cost of $100 with a new and improved part costing 515*.) per unit in the coming year. Required: 3] 1What auras Manchester's contribution margin ratio last year?I [3 marks} h} Iiiir'hat was Manchester's breakeven point in number of units last year? (3 marks} c] 1What will the new breakeven point in number of units be if the suggested changes is not made in the coming year. however, feted cost increase by 10%. {5 marks} d} How many computer games would have had to sell last year to earn a target net prot of Il? {4 marks) e] HManchester holds the sales price constant and makes the suggested changes, how many units must be sold in the coating year to earn a target net prot of $1,,?l5 marks} Question 2 Direct Material and Labour Variance: Manufacturer 10 marks During September, Wonderland Lid material purchases amount to 7,000 kilograms at a price of $8.00 per kg. Actual costs incurred in the production of 2,700 units were as follows: Direct labour $118,611 $19.10 per hour Direct material $51,000 $8.00 per kilogram The standard for one unit of product is as follows: Quantity Price/Rate Direct Labour 2.5 hours per unit $21 per hour Direct material 2.5 kilograms per unit $7 per kilogram Required: Calculate the following variance, indicating whether each variance is favorable or unfavorable: (a) Direct material price variance. (2 12 marks) (b) Direct material quantity variance. (2 1/2 marks) (c) Direct labour efficiency variance. (2 1/2 marks) (d) Direct labour rate variance. (2 1/2 marks)