Question 5 (20 Marks) The Wonderland Trading manufactures and sells sustainable playground equipment which is suitable for a home yard, in a public park or even on the grounds of a hotel. The company beliefs that its playground equipment supports kids learning environment in terms of increasing children's concentration, improving social skills and fostering their creativity. The playground equipment are gaining popularity especially amongst the pre-school providers. Its current sales are RM9,500,000.00. The operating statement for 2019 shows the following information: RM'000 RM'000 Sales (20,000 units) 9,500 Direct materials 1,800 Direct labour 1,300 Production overheads 1,200 4.300 Gross Profit 5,200 The variable production overheads are RM30.00 per unit. Total selling overheads for the period are RM1,600,000.00, in which the variable selling overheads per unit are RM40.00.Required: a. Based on the operating statement above. determine the contribution margin {in total and per unit} and the margin of safety in units for the period. {it} marks} b. The company has a capacity of mono units per year. Management is optimizing about the future looks of sustainable playground equipment. In order to increase its market share. two courses of options for the coming year are proposed in the recent management meeting: Option 1': The sales manager believed that unit volume would increase by 30% with the incurrenoe of RMEEDOUD on advertising. Option 2: The general manager considered that full capacity could be reached if the selling price is cut by 10%. In addition. the direct material cost would be reduced by 5% following a minor modification of the specication of the product. Based on the option above. prepare the budgeted operating statement for the coming year in columnar format. using a contribution margin approach for each option. [3 marks} o. Based on your answer in {b}. recalculate contribution margin {in unit) for each option. [2 marks] END OF lI'fliUESTlOItIS