Question 4 (30 marks) Mediocre Medical Centre would like you to investigate building a florist in the medical centre. There would be 3 products: Roses, Natives and Imported flowers. Based on an analysis from another florist shop, there seems to be considerable variation in sales volume and variable costs. You believe that the forecast should be evaluated from a cost-volume-profit viewpoint. The preliminary budget information is as follows: Roses Natives Imported Units sales 50,000 50,000 100,000 Unit selling price $30 $45 $54 Variable cost per unit $19 $26 $34 Variable selling cost per unit $10 $12 For the coming year, fixed manufacturing overhead is budgeted at $400,000. The company's fixed selling and administrative costs are forecast to be $350,000. Mediocre Medical Centre will pay tax at 40%. 2. Assuming the sales mix remains as budgeted, determine how many units of each product MMC must sell in order to break even in the coming year. (10 marks) 3. After preparing the original estimates, management determines that the variable manufacturing cost of imported flowers would increase by 20% and the variable selling cost of natives could be expected to increase by $3.00 per units. However, management has decided not to change the selling price of either product. In addition, management have learned that imported flowers are perceived to be the best value for money, and they can expect to sell three times as many imported flowers as each of their other products. Under these circumstances, determine how many units of each product MMC would have to sell in order to break even in the coming year. (10 marks) 4. Write a one-page memo to management, recommending what action they should take, as determined in Parts 2 and 3. Provide justification for your choice