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(Total: 16 marks) QUESTION 2 Today is 10 January 2022 and you have received the following email from Miss Farra Amber. From : Finance and Accounts Manager Sent : 10 January 2022 Subject : Analysis on tour package Dear Management Accountant, Thank you for the prompt reply in providing the performance report for 2021. During the previous management meeting, the Sales and Marketing manager, Ms Emmy had highlighted that there has been a decreasing demand for certain tour packages for the past few years due to Covid-19 pandemic. The management team is now considering eliminating the tour package that appears to be unprofitable. After careful analysis, I noticed that perhaps it will be feasible for the company to just focus on the private and solo tour instead of the group tour due to the net operating losses recorded. Kindly refer to the following Statement of Profit or Loss of tour package for the year 2021. Group Tour Private Solo Tour Total Tour Sales 50,000 125,000 75,000 250,000 Variable costs 30,000 50,000 25,000 105,000 Contribution margin 20,000 75,000 50,000 145,000 Fixed costs: Salaries Advertising Utilities Depreciation-office equipment Depreciation-motor vehicle Insurance General administrative 8,000 6,500 1,000 2,000 29,500 1,000 500 1,000 12,500 7,500 500 2,000 50,000 15,000 2,000 5,000 4,000 10,000 6,000 20,000 500 6,000 28,000 2,000 15,000 59,000 500 9,000 38,000 3,000 30,000 125,000 (8,000) 16.000 12.000 20.000 Net operating profit (loss) Required: i. Briefly explain FIVE (5) common pricing strategies that Marvel Getaways can use to determine price of the virtual tourism package. Your answers should include both advantages and disadvantages of each strategy. (10 marks) Propose one appropriate pricing strategy to be used by Marvel Getaways considering the current economic conditions with relevant justifications. (5 marks) ii. iii. Briefly discuss the implications when management of Marvel Productions S/B and Marvel Getaways S/B use the following cost-based approaches for transfer pricing: a. Marginal cost b. Full cost-plus mark-up (4 marks) (Total: 19 marks) (Grand total: 50 marks)