Question 2:(15 marks - 27 minutes) Division A processes product Beta at a variable cost of N$4 per unit. No incremental fixed costs or opportunity costs are incurred. Division B completes the production of product Beta at a variable cost of N$6 per unit and fixed cost of N$200000. The market demand for the final product is as follows: Question 3:(10 marks - 18 minutes) JJ Cc is a family company that specialises in producing air freshener for home use and office use. The company has just developed a new product called "cool breeze" which will provide a competitive advantage over it is rivals. The finance director has asked you to assist in preparing some financial information for use at the next meeting. The following costs budget has been estimated based on forecast sales of 6000 units: Manutacturing overneads are absorbed on the bass of bU% or direct costs and U% of the manufacturing overhead is variable. Selling and administrative costs are based on 25% of total manufacturing cost and do not vary with the level of activity. Halfway through the budget period it became evident that this estimate results in higher prices charged to customers and the management accountant has revised the estimated units to be sold to increase it to 7000 units in order that the price charged will be reduced to attract customers. Other relevant information are given below: JJ Cc requires a profit of N$70000 on investment. \begin{tabular}{|l|l|c|} \hline REQUIRED & Marks \\ \hline 3.1. Assume that the board of director has approved the revised estimate of 7000 units and thefirm & \\ & uses cost-plus pricing (round ALL answers to two decimals). & \\ & a) Calculate the mark-up and selling price based on variable cost at 7000 units & 6 \\ & b) Calculate the mark-up and selling price based on total manufacturing at 7000 units & 2 \\ \hline & c) Calculate the mark-up and selling price based on total cost at 7 000 units & 2 \\ \hline \multicolumn{2}{|l|}{ TOTAL MARKS } & 10 \\ \hline \end{tabular} Page 3 of 4