QUESTION 6 (10 marks; 18 minutes) Your are the management accountant of Celltel (Pty) Ltd, a subsidiary of Vig Ltd. Celltel (Pty) Ltd manufactures a single type of cellular telephone and has a maximum plant capacity of 5000 units per annum. Vig Ltd's group financial manager is currently preparing Vig Ltd's consolidated budget for the 2008/2009 financial year Celltel (Pty) Ltd's sales director has estimated the following sales forecast for the relevant period Minimum annual sales 3 200 units Maximum annual sales 4 000 units Based on these estimates, you have prepared the following budget and submitted it to the group financial manager: Maximum Minimum 3 200 000 3 120 000 4 000000 Sales Cost of sales Profit 3 600 000 80 000 400 000 In your budget you have noted the following assumptions: Fixed costs remain the same within the relevant range Inventory changes are anticipated to be negligible Required The group financial manager has now requested you to provide further information 6.1 to assist her in the finalization of the consolidated budget, namely: a. Contribution per unit b. Fixed costs per annum Break-even point in units and rand value. Margin of safety percentage of the minimum forecast. (In your answer interpret this and indicate why it might be useful to management) d. e. Budgeted profit, assuming an average sales forecast