I wanted to ask a few question regarding question 1 of the paper I attached. Do I have to include the inflation rate in the fixed costs, direct material, labour and overheads? Also since it says that the total demand for cakes is at current selling prices, does this refer to the selling prices before or after inflation? Lastly, in part (c) do we have to calculate the expected value for the inflation rate (which turns out to be 3.8%) in order to compute the value of the business profit? ATTACHMENT PREVIEW Download attachment exam paper.pdf