QUESTION $3(20$ Marks$)3\mathrm{.}1$ REQUIRED$$Study the information given below and answer each of the following questions independently. The $$expanded contribution margin model must be used to answer questions $3\mathrm{.}1\mathrm{.}2$ and $3\mathrm{.}1\mathrm{.}3.3\mathrm{.}1\mathrm{.}1$ Calculate the margin of safety $($as a percentage, expressed to two decimal places$).(4$ marks$)3\mathrm{.}1\mathrm{.}2$ Calculate the number of units that must be sold if the company desires an operating profit$$of R$2700000.(4$ marks$)3\mathrm{.}1\mathrm{.}3$ Suppose the company wants to spend an additional R$240000$ on advertising and reduce$$the selling price by R$8$ per unit, with the expectation that the sales volume will increase by $20\%.$ Is this a good idea? Motivate your answer. $(4$ marks$)$INFORMATION$$Viking Ltd manufactures a product that sells for R$108$ each. Production and sales are presently $100000$ units $$per year. Variable manufacturing costs are R$54\mathrm{.}60$ per unit, of which R$10\mathrm{.}00$ per unit are for overheads. $$Salespersons earn a commission of $5\%$ of sales. Fixed costs amount to R$2720000$ for manufacturing $$overheads and R$1180000$ for selling and administrative activities.$3\mathrm{.}2$ REQUIRED$$Use the information given below to calculate the following. The expanded contribution margin model must $$be used to answer questions $3\mathrm{.}2\mathrm{.}2$ and $3\mathrm{.}2\mathrm{.}3.3\mathrm{.}2\mathrm{.}1$ Variable costs per unit $(2$ marks$)3\mathrm{.}2\mathrm{.}2$ Break$-$even value using the contribution margin ratio $(2$ marks$)3\mathrm{.}2\mathrm{.}3$ Selling price per unit that will enable the company to break even if the variable costs $$amount to R$260$ per unit. $($Ignore the contribution margin ratio of $40\%.)(4$ marks$)$INFORMATION$$The following information regarding a product manufactured by Abel Limited is available:$$Fixed costs per annum R$2000000$Selling price per unit R$400$Contribution margin ratio $40\%$Expected sales are $20000$ units