Advanced (32 marks; 58 minutes)

A computer software company develops and sells three computer games, Gino, Dust and Elton. The combined sales of all the products in 2XX7 was 9 000 units and total xed costs amounted to R726 000.

Other relevant data for 2XX7 were as follows:

Management expects sales in the current year to remain at 9 000 total units and there is no intention to change the selling price or cost structure. However, by reducing marketing expenditure on Gino and spending more on Dust and Elton, the marketing director believes that the sales mix can be changed to 2:3:5.