The following table depicts the budgeted sales volume and per unit costs and profits for an English manufacturer (Toys Ltd.) of two different children's toys, both of which are produced in the same...

Extracted text: The following table depicts the budgeted sales volume and per unit costs and profits for an English manufacturer (Toys Ltd.) of two different children's toys, both of which are produced in the same factory: IB BSc SS 2020 Product A B Budgeted sales (units) 2500 3000 £ Sales price per unit 40 39 Material 12 6 Labour 12 20 Variable overheads 5 4 Fixed overhead per unit 10 Total cost per unit Profit per unit 35 40 5 -1 (a) Calculate the contribution per unit and total contribution for each of the two products. Since product B is unprofitable, calculate its break-even output i.e. sales quantity. Should management discontinue its production? Explain and justify your answer. (b) packaging machine. For a total investment of £10,000, Fixed Overhead Cost can be reduced by Consider Toys Ltd. again. Assume that the production manager is considering a new £5,000 and the per unit cost of material and labor can both be reduced by 10%, for both products. Calculate the impact of such a scheme on total profits. Should they accept or reject this new scheme?