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Transcription of this question: Small-Scale Hobbies (SSH)Scale Airplane Modeller is a magazine produced by Small-Scale Hobbies (SSH).The company sells the magazine through independent retail outlets in the US.The finance director produced a summary of 2018’s financial information. Last year’sbreak-even chart showed that SSH had a margin of safety of 20000 units.Table 1: Selected financial data for SSH for 2018:Annual fixed costsVariable costs per magazine producedMagazine price$100 000$2$4.50This year, to reduce costs and to increase sales, the company will introduce new productionmethods, which will reduce:unit variable costs by 10%• fixed costs by $5000 per year.(a)(b)Define the term margin of safety.Using the financial data in Table 1, calculate:(i) the break-even level of output (show a/’ your working);[2][2](ii)(iii)the percentage of total costs that were fixed costs for last year (show all yourworking);the level of profit for SSH at 2018’s level of production (show all your working).(c)Explain how the introduction of new production methods will affect the total cost line inSSHs break-even chart.[2][2][2]

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