this assignment is due today.

Question two (a) The following was extracted from the standard cost card of Kale Cement ple Selling price 100kg pocket of cement K360 Direct material cost per 100kg pocket of cement K50 Direct labour cost per 100kg pocket of cement KIO Variable production overhead per 100kg pocket of cement 29 Other relevant cost information extracted from the budgets: Fixed production costs K9,750,000 Fixed selling and distribution costs K3.456,000 Sales commission 5% of selling price Sales 90.000 100kg pockets of cement. REQUIRED: 1. Calculate the breakeven point both in sales volumes (number of pockets) and sales value. (2 marks) 2. Calculate the margin of safely both in percentage and in volume (2marks) 3. Suppose the selling price per pocket of cement was to be increased to K375 and the sales commission increased to 8% and a further K150,000 on advertising Calculate the revised breakeven point sales volume based on suggestion in (3) above and comment accordingly. (6marks) (b) The following information applies to a company operating in Chilanga. It is the operational results for the year just ended, 2019 The company, which manufactures a single product coded 'zeron', achieved a sales value of 8.000.000 for the period under consideration. A unit of 'zeron' was being sold at K20. During the period under review, the company operated at 80% capacity. Suggestions are being made to increase the operating capacity. Details of the cost structure are hereby given: ME Direct material K4 Direct labour KA Variable production overhead K80,000 Variable selling overhead K160,000 Variable distribution overhead K120,000 Fixed production overhead K320,000 Fixed selling overhead K180,000 Fixed distribution overhead K80.000 Fixed administration overhead K1,440,000 Further, sales agents are paid a commission of 5% on sales value for selling 'zeron'. Required (a) Compute the company's breakeven point in sales value (2 marks) (b) Prepare income statements, given three scenarios depicted hereunder: Scenario 1 At the present level of sales Scenario 2 if the unit selling price is reduced by 5% which should increase sales volume by 12.5% Scenario 3 If the unit selling price is reduced by 10% which should increase sales volume by 25% Comment on scenario three above which will stretch the capacity limit (10 marks)