Referencing Styles : Harvard MT is a manufacturer of children’s Mobile Phones. In the Budget-setting process, Budget X was prepared by lower and middle management. Budget Y was prepared by senior management. X Y Unit Sales 20000 30000 Dollar Sales $600,000 $900,000 Less: Variable expenses: Direct materials 260,000 360,000 Direct Labour 40,000 60,000 Variable Overhead 60,000 75,000 Variable Selling and administrative expenses 60,000 60,000 Total Variable expenses $420,000 $555,000 Contribution margin $180,000 $345,000 Less: Fixed expenses: Manufacturing Overhead $60,000 $50,000 Selling and administrative 100,000 80,000 Taxes and Interest 10,000 10,000 Total fixed Expenses $170,000 $140,000 Net Profit (Loss) $10,000 $205,000 Required a) Calculate the cost per unit for the Variable costs (2 marks) b) Why do you think budget X has high costs and low sales forecasts?