5 Reqlebo R8 x Ltd a monufacturing company having a capucity of 7 lakh units hus twehred the tollowing cost sheet D.M (Direct Material 30. Factory overhead 30 (50% variable) Direct wages- 19. sell and nadmin o.H 18 [two third fixed 120 Selling Price- During the year 2007-08, the sales volume achieved by the company was 6 lakh units. The company has launched an expansion programme, the details of which are as under (1) The capacity will be increased to 12 lakh units. (in The additional fixed overheads will amount to Rs. 50 lakhs upto 10 lakh units and will increase by Rs. 25 lakh more beyond 10 lakh units. After the expansion is put through, the company has two alternatives for operatione (Sales can be increased up to 10 lakh units by spending Rs. 10,00,000 on special advertisement campaign to explore new market. Or (i) Sales can be increased to 12 lakh units subject to the following: By an overall reduction of Rs. 10 per unit in selling price on all the units sold. . By increasing the variable selling and administration expenses by 8%. . The direct material costs would go down by 1.5% due to discount on bulk purchasing Requirements: I. Construct a Flexible Budget at the level of 6 lakhs, 10 lakhs and 12 lakhs unit of production. II. Calculate Break Even Point before and after expansion. III. Advise the optimum level of output for expansion. 0.3The 2012 financial statements for Price and Waterhouse Companies are summarized here: (14)