Question 5 (10 Marks) An extract from the income statement of POMA Ltd for the previous year is given below: Rs. Sales (50,000 units) 1,000,000 Direct materials 350,000 Direct labor cost (50,000 hours) 200,000 Fixed manufacturing overhead 230,000 Variable manufacturing overhead 50,000 Administration overheads 180,000 Selling and distribution overhead 120,000 The directors are keen to improve revenue and productivity and are considering various options, You are the management accountant and are requested to compute the following: a. If salesmen are paid commission of 10% of sales, how many units must be sold to achieve breakeven point. (2 Marks) b. By how much does profit change increase or decrease) if the selling price is reduced by 10% resulting in an estimated increase in sales volume (in number of units) by 30%. (2 Marks) C. By how much does profit change (increase or decrease) if the direct labor rate is increased from Rs.4 to Rs.5 per hour. This increase is expected to increase production and sales by 20% without affecting the hours worked. However, advertising costs will increase by Rs.50,000. (2 Marks)