QUESTION 9 (22 MARKS) KOWKOW is a sole manufacturer of plastic shields to cater for local market. The following information was obtained from the KOWKOW: The selling price per shield is $60. The variable manufacturing cost is $20 per shield and the variable selling expense is $4.00 per shield. Total fixed manufacturing costs were $1,200,000 and total selling, marketing and administrative costs were $400, 000. KOWKOW managed to sell 120,000 shields in the current year. As part of its strategy to increase its sales during the pandemic season, KOWKOW plans to decrease its selling price by 10% per shield next year. The decision to decrease its selling price was made to meet the decrease of its fixed cost (in total) by 20% the following year. Ignore income tax considerations. Required: a. Calculate the current year's breakeven in revenue (i.e. before the proposed increases next year) (4 marks) b. Compute the net profit for the current year (before the proposed increases next year). Show all workings. (4 marks) C. Compute the number of shields KOWKOW needs to sell in the following year in order to achieve the same net profit as the current year (i.e. the net profit calculated in part (b) above), if the planned decrease in the selling price per unit and fixed cost in total is implemented. Assume that the variable cost per unit remains the same. Show all workings. (4 marks) d. KOWKOW have a plan to migrate it production to DHANANG. KOWKOW will be able to reduce its variable manufacturing cost by 5% and fixed manufacturing cost by 10%. This will result in the company being able to reduce its selling price by 5%. Using break-even calculation, should KOWKOW adopt this plan? Show all workings. (3 marks) e. Explain the benefits of a break-even analysis to KOWKOW in its decision-making process. (4 marks) f. Explain the term 'behavioural-congruence using relevant illustrations