(a(i))[1]
Define what is meant by contribution per unit.
(a(ii))[1]
Define what is meant by stepped costs.
(a(iii))[1]
Define what is meant by margin of safety.
(b)[2]
State any two benefits of marginal costing.
(c)[3]
Calculate the monthly break-even point measured in units.
(d)[7]
Prepare a marginal costing statement to show the monthly forecast profit if the improved product is made.
(e(i))[4]
The first option
(e(ii))[4]
The second option
(f)[7]
Advise the directors on which option to choose. Justify your response by taking both options into account.