V. Current ratio QUESTION 3 The following information relate to tow businesses: Polihali (Pty) Ltd M...
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V. Current ratio QUESTION 3 The following information relate to tow businesses: Polihali (Pty) Ltd M 20 12 20,000 Unit selling price Unit variable cost Fixed costs Contributin ratio Graphics (Pty) Ltd M 20 10 20,000 20 де аде O (a) Calculate the Break-even sales units. (b) Calculate the Sales revenue at break-even point (c) Explain the meaning of Margin of Safety. [4] [4] [1] (d) Using planned sales units of 5,000 calculate the Percentage Margin of Safety for the two companies and indicate and explain the business that is performing better. [6] (e) Assuming there is a 20% reduction in the unit selling price of both companies and all other costs remaining unchanged, calculate the new break-evens sales revenue. [6] [4] (f) State TWO assumptions of CVP analysis. CD All other vanable renetin Constant Ⓒ sugle product or 3 Constar Sales mix Serwis - variable fixed cost Selurs-vanable fuxed cost Contribution maatsc 66 nor gun es so yo contribution nacrgin= Contribution mugur fixed cost 20000 x20=41 Selling 5° 00 [5] 10 plamed sales planea sak - break evenborg planned sales wat 20 X 500 - 0.5 12 x 20 sert rt sc Page 10 of 10 V. Current ratio QUESTION 3 The following information relate to tow businesses: Polihali (Pty) Ltd M 20 12 20,000 Unit selling price Unit variable cost Fixed costs Contributin ratio Graphics (Pty) Ltd M 20 10 20,000 20 де аде O (a) Calculate the Break-even sales units. (b) Calculate the Sales revenue at break-even point (c) Explain the meaning of Margin of Safety. [4] [4] [1] (d) Using planned sales units of 5,000 calculate the Percentage Margin of Safety for the two companies and indicate and explain the business that is performing better. [6] (e) Assuming there is a 20% reduction in the unit selling price of both companies and all other costs remaining unchanged, calculate the new break-evens sales revenue. [6] [4] (f) State TWO assumptions of CVP analysis. CD All other vanable renetin Constant Ⓒ sugle product or 3 Constar Sales mix Serwis - variable fixed cost Selurs-vanable fuxed cost Contribution maatsc 66 nor gun es so yo contribution nacrgin= Contribution mugur fixed cost 20000 x20=41 Selling 5° 00 [5] 10 plamed sales planea sak - break evenborg planned sales wat 20 X 500 - 0.5 12 x 20 sert rt sc Page 10 of 10 V. Current ratio QUESTION 3 The following information relate to tow businesses: Polihali (Pty) Ltd M 20 12 20,000 Unit selling price Unit variable cost Fixed costs Contributin ratio Graphics (Pty) Ltd M 20 10 20,000 20 де аде O (a) Calculate the Break-even sales units. (b) Calculate the Sales revenue at break-even point (c) Explain the meaning of Margin of Safety. [4] [4] [1] (d) Using planned sales units of 5,000 calculate the Percentage Margin of Safety for the two companies and indicate and explain the business that is performing better. [6] (e) Assuming there is a 20% reduction in the unit selling price of both companies and all other costs remaining unchanged, calculate the new break-evens sales revenue. [6] [4] (f) State TWO assumptions of CVP analysis. CD All other vanable renetin Constant Ⓒ sugle product or 3 Constar Sales mix Serwis - variable fixed cost Selurs-vanable fuxed cost Contribution maatsc 66 nor gun es so yo contribution nacrgin= Contribution mugur fixed cost 20000 x20=41 Selling 5° 00 [5] 10 plamed sales planea sak - break evenborg planned sales wat 20 X 500 - 0.5 12 x 20 sert rt sc Page 10 of 10 V. Current ratio QUESTION 3 The following information relate to tow businesses: Polihali (Pty) Ltd M 20 12 20,000 Unit selling price Unit variable cost Fixed costs Contributin ratio Graphics (Pty) Ltd M 20 10 20,000 20 де аде O (a) Calculate the Break-even sales units. (b) Calculate the Sales revenue at break-even point (c) Explain the meaning of Margin of Safety. [4] [4] [1] (d) Using planned sales units of 5,000 calculate the Percentage Margin of Safety for the two companies and indicate and explain the business that is performing better. [6] (e) Assuming there is a 20% reduction in the unit selling price of both companies and all other costs remaining unchanged, calculate the new break-evens sales revenue. [6] [4] (f) State TWO assumptions of CVP analysis. CD All other vanable renetin Constant Ⓒ sugle product or 3 Constar Sales mix Serwis - variable fixed cost Selurs-vanable fuxed cost Contribution maatsc 66 nor gun es so yo contribution nacrgin= Contribution mugur fixed cost 20000 x20=41 Selling 5° 00 [5] 10 plamed sales planea sak - break evenborg planned sales wat 20 X 500 - 0.5 12 x 20 sert rt sc Page 10 of 10
Expert Answer:
Answer rating: 100% (QA)
a To calculate the breakeven sales units we need to use the formula Breakeven sales units Fixed costs Unit contribution margin For Polihali Pty Ltd Fixed costs 20000 Unit variable cost 12 Unit selling ... View the full answer
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