QUESTION THREE: COST-VOLUME-PROFIT ANALYSIS (25 MARKS) CVP Ltd manufactures and sells product X. The following information was extracted from the previous financial year's accounting records of CVP Ltd. Additional information - CVP Ltd manufactured and sold 1800 units of product X in the previous year. The company's capacity for producing product X is limited to 3000 units. - All administrative costs are fixed. - Selling and distribution costs vary with the number of units sold. REQUIRED 3.1 Using CVP Ltd.'s last financial year's data, how many units of product X can CVP Ltd sell to breakeven? (8 marks) 3.2 If the previous year's selling price and costs are expected to remain unchanged in the next financial year, and the number of units to be sold is estimated to increase by 300 from the previous year, how much is the estimated profit that CVP Ltd will earn in the next financial year? (5 marks) 3.3 If CVP Ltd expects the following in the next financial year, how many units can it sell to earn a profit of R30000 : (9 marks) - Selling price per unit to decrease by 20%; - Manufacturing variable costs to increase by 20%; - Selling and distribution costs to increase by R30 per unit; and - All fixed cost to remain unchanged 3.4 Briefly discuss three assumptions underlying cost-volume-profit analysis