$5\mathrm{.}2.$ Use the information provided below to answer the following questions.

INFORMATION

Suppose a prominent multinational company $($MNC$)$ is contemplating the establishment of a new manufacturing facility in South Africa, intending to serve customers across the Southern African Development Community $($SADC$)$ region. The company is currently in the final stages of selecting a suitable location for the facility from three potential cities: Johannesburg, Cape Town, and Durban.

$\backslash$table$[[$Location$,$Johannesburg,Cape Town,Durban$],[$Expected sales $($@R$2500$ per unit$),5000$ units,$5000$ units,$5000$ units$],[$Total fixed manufacturing costs,R$600000,$R$1200000,$R$2200000],[$Direct material cost per unit,R$400,$R$200,$R$130],[$Direct labour cost per unit,R$(150,$R$120,$R$100],[$Variable overhead per unit,R$200,$R$180,$R$120]]$

REQUIRED:

$5\mathrm{.}2\mathrm{.}1.$ Specify THREE steps that the multinational company should consider in the locational break$-$even analysis.

$(3$ marks$)$

$5\mathrm{.}2\mathrm{.}2.$ On the basis of the data provided above, undertake a locational cost$-$volume analysis to determine the most suitable location for the MNC$\text{'}$s facility in South Africa. As part of the analysis, $($a$)$ formulate the

$(11$ marks$)$

cost function for each of the three locations, $($b$)$ determine the total cost for each location for the $5000$ nits of production, and $($c$)$ calculate the expected profit for each location if all the $5000$ units produced are old at $R2500$ per unit.