Part B: Cost-Volume-Profit Analysis 1) Basic calculations Option A B C D Description Update Reduce Do nothing machinery & Do both price production Contribution/unit ($) Fixed cost ($) Breakeven (units) Expected sales (units) Expected profit ($) 2) Profit-vs-volume calculations Sales (units) 0 50,000 100,000 150,000 200,000 Expected profit, no change ($) Expected profit, machinery and production methods updated ($) 3) RecommendationsRedsaw Limited has prepared the following profit analysis, for the current financial year: Sales {150,000 units) 5 1,275,000 Variable expenses 5 697,500 Contribution margin 5 577,500 Fixed expenses 5 222,000 Profit 5 355,500 Management are considering a range ofoptions to improve profitability. These options include reducing the selling price by $0.25 per unit and updating machinery and production methods. If machinery and production methods are updated, fixed expenses will increase by $52,000 per year and variable expenses will decrease by 51.10 per unit. However, management are concerned at the increased risk and changes to the level of operating gearing. If the selling price is reduced by $0.25 per unit, the number of units sold is expected to increase by 5%. There is no reason why management cannot reduce the selling price and update machinery and production at the same time. Required: 1} Calculate the contribution margin per unit, total xed costs, the breakeven point in units, and total expected {16 marks} profit for all of the possible choices that management can make. Show the results of your calculations in the table in section 1, part B of the template. 2} Complete the following table in section 2, part B of the template, showing expected profit at various sales {10 marks} levels for {i} the current state of operations (no changes} and iii} the case where machinery and production methods are updated. Show all amounts in whole dollars (do not include cents}. W\" 150.000 200.000 Expected profit {no change} Expected profit {machinery 8: production methods updated} 3} Based on your results for part 2 produce a prot-volume chart. Show both cases on the same set of axes. {9 marks} Insert the chart into the space provided {Figure A1} in the Appendix, at the end ofthe template