Smug Ltd produces and sells two versions of fruit juicers: Deluxe and Premium. The juicers produced by Smug Ltd use a patented technology to extract maximum possible juice from most fruits. The 'Premium' version can handle larger fruit and has more processing options relative to the 'Deluxe' version. The following table provides the financial results of the most recent year of operations: Particulars Units sold Revenue ($) Direct material cost (S) Direct labour cost ($) Contribution ($) Allocation fixed manufacturing overheads ($) Allocated fixed selling and after sales support costs ($) Operating profit ($) Profit margin per unit ($) Deluxe 90,000 6,300,000 1,080.000 1,440,000 3,780,000 3,420,360 251,563 Premium 10.000 900.000 250,000 160,000 490,000 380,040 35,937 Total 100,000 7,200,000 1,330,000 1,600,000 4,270,000 3,800,400 287,500 108,077 $1.20 182, 100 74,023 $7.40 Labour cost is $16 per hour and each product requires one (1) hour of labour time. The company currently allocates all fixed manufacturing overheads using labour hours as the allocation basis. The company currently allocates fixed selling and after sales support costs using revenue as the allocation basis. Although the profit margin per unit of Deluxe version is rather low, Smug Ltd believes that it is strategically important to keep this model in the product mix keeping in mind its future export potential at a higher selling price. However, Smug Ltd can tailor its promotion and sales strategies to improve the sales mix to 8:2 from the current 9:1 ratio of 'Deluxe' to 'Premium" juicers, with total volume staying at 100,000 units. The notes to accounts indicate that of the total fixed manufacturing overheads, $1,100,400 relate to batch related activities such as scheduling production runs and the rest of the fixed manufacturing overheads relate to unit level activities. $114,600 is the amount of admin overheads out of the total selling and admin overheads. It is also noted that the Premium Juicer is produced in smaller batches (250 units per batch) than that of Deluxe juicer (500 units per batch). Similarly, it takes 10 sales visits to sell 1,000 units of the 'Deluxe' juicer, while it takes 25 visits to sell 1,000 units of 'Premium juicer. Required (a) Prepare a profitability statement based on the proposed sales mix, using the current method of allocating overheads. (b) Prepare a profitability statement based on the proposed sales mix, using a more appropriate basis of allocating overheads. (c) Advise the management of Smug Ltd on whether it should go ahead with the proposed change in sales mix