QUESTION 3 REQUIRED Refer to the information given below and answer each of the following questions independently: (20 Marks) 3.1 Calculate the margin of safety (in units). (4 marks) 3.2 Calculate the total Contribution Margin and Operating Profit/Loss if an increase in the salaries expense of salespersons by R480 000 is expected to increase sales by 450 units. (3 marks) 3.3 Suppose Sinclair Limited decided to set the sales price at R1 728 per unit. If sales drop to 3 500 units, how much more can the company spend on advertising and be able to generate an operating profit of R1 000 000? (4 marks) 3.4 Should management consider a drop of R60 per unit in the selling price if the sales volume is expected to increase to 4 400 units? Motivate your answer with the relevant calculations. (4 marks) 3.5 Determine the selling price per unit that will enable the company to achieve an operating profit of R1 602 000. (5 marks) INFORMATION Sinclair Limited is analysing whether its new product will be profitable. The following data, based on expected sales of 4 000 units, is provided for analysis: Selling price per unit Direct materials cost per unit Direct labour cost per unit Variable overheads cost per unit Fixed manufacturing overheads cost Sales commission (as a percentage of the selling price) Fixed administrative and selling costs R1 620 R350 R250 R102 R1 000 000 10% R738 800