QUESTION THREE ERS ltd is a company engaged in the manufacture of sports shoes. The last financial year to 31 January has seen the company produce its lowest profit for five years. The summary profit and loss account for the year to 31st January is set out below K K Sales revenue (50,000 shoes @ K70) 3,500,000 Cost of sales Direct materials 1,400,000 Direct labour 1,150,000 200,000 410,000 3,160,000 Variable manufacturing overheads Fixed manufacturing overheads Total manufacturing costs Gross profit Selling and distribution overheads (Fixed) Administration cost Net profit 340,000 134,000 148,400 57,600 REQUIRED: Compute the break-even level of activity and revenue to break-even on the basis of last year's results [Total 10 marks]