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Transcription of this question: InformaticInformatic manufactures computers and is based in Sri Lanka. Informatic uses a method Ofbatch production and manufactures batches Of computers according to customer specificationssuch as computer speed and screen size. Production workers are paid by the hour but receive alower than average wage for Sri Lanka. TO compensate they are offered long-term job security andOther non-financial rewards.Informatic exports 4000 computers a year to Pakistan using local independent distributors whohave knowledge Of the local market as well as experience in delivering and installing computers.90% Of Informatic’s sales are organized through such distribution channels. Because using localindependent distributors increases the final price Of the computer to the customer, senior managershave decided to Offer customers in Pakistan the opportunity to purchase computers directly fromInformatic. Customers have to telephone orders to Informatic in Sri Lanka from Pakistan becausee-commerce sales are not available.The following are Informatic expense and sales price figures:• fixed costs Of 100 000 per year• variable costs Of Of the sales price• sales price Of S 1000 per computer.(i)(ii)Define the term batch pmduction_Identify two fixed costs for Informatic.(b)(c)For Informatic:(i) calculate the break-even quantity in units (show all your working).(ii) calculate the margin Of safety in units (show all your working).(iii) calculate the net profit if4000 computers are sold (show all your working).(iv) prepare a fully labelled break-even chart.Examine the effectiveness Of the new distribution channel for Informatic.[2 marks][2 marks][2 marks][2 marks][2 marks][5 marks][5 marks]

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