E AAF037 2 SEM1 20 21 test X + A O File C:/Users/alexa/OneDrive/Desktop/AAF037-2_SEM1_20-21_%20testttttt.pdf + of 9 E A Read aloud | Draw Highlight Erase 8 E Question B3 The profit statements for two different companies in the same industry are as follows: Company Alpha Company Beta (000) (000) Sales 10,000 10,000 Less: Variable costs 8,000 4,000 Contribution margin 2,000 6,000 Less: Fixed Costs 1.000 5,000 Profit 1.000 1,000 a) Calculate the break-even point in sales for each company. Explain why the break-even point for Company Bela is higher. (9 marks) b) Explain the following terms 1. Margin of safety 2. Indirect cost (8 marks) c) Explain the advantages and limitations of using the variable costing approach to decision making. When is it useful, when is it not? (8 marks) d) Franco Ltd makes 900 baby rattles/year with a unit SP of 10 and VC of 8. FC are 900/pa. She is considering supplying a new customer with 100 rattles, but at a discounted price of 8.25/rattle. Should she accept the order? (5 marks) Total 30 marks Type here to search OP Dax ENG 11:06 12/01/2021