Variable production overhead cost = M$40 per unit Sales price = M$95 per unit Fixed costs - M$590,000 per annum 37 | Page EXAM CASE STUDY Required: a) Using the above provided information calculate: - 1. The revised projected sales volume for years 1, 2 and 3, showing the 55% increase. (2 marks) 2. The breakeven point, in units and sales value (4 marks) 3. The margin of safety in units and as a percentage for year 3 using the current and revised sales figures (4 marks) 4. The sales volume required to meet the above stated target profit of M$1.25m. (2 marks) b) Using the results from part a, provide an analysis of the current position and the revised position which clearly explains whether either will meet the finance departments target positions, (5 marks) c) Critically evaluate the proposed pricing strategy for the coffee machines, taking into consideration the results of your findings from (a) and the alternative pricing strategies Shinepodd could use instead. (20 marks) d) Make a reasoned recommendation as to whether the Chief Finance officer should agree to the proposed pricing strategy. (3 marks) Student marking guide for part c above Please read the rubric below for guidance on how you will be marked. Please note, this is a 420-mark question only so as a general guide your answer should be no more than about 2 sides of A4 or say 800 words