3 Page QUESTION 3 C-V-P ANALYSIS 25 MARKS Avheani (Pty) Ltd. manufactures 100% apple juices using an almost fully automated manufacturing process. The company manufactures 48 000 units of juices per year. The following is a budgeted Income Statement for the business for June 2017: R R Sales Revenue 9,600 Direct Material 4,000 Direct Labour 960 Production Overhead 3,600 Selling Overhead 560 9.120 Profit 480 The following information is also supplied: 1. The monthly budgeted production and sales is 4,000 units. 2. The following breakdown between fixed and variable costs applies: Variable Fixed Direct Materials 100% n/a Labour R400 R560 Production Overhead R1,440 R2,160 Selling Overhead 100% n/a Required: 3.1. Calculate the following: 3.1.1 Contribution for the year 3.1.2 Contribution per unit 3.1.3 Contribution / sales ratio 3.1.4 Breakeven sales volume using profit formula 3.1.5 Margin of safety % 3.1.6 Sales volume required to achieve a profit of R1, 440. (4 Marks) (4 Marks) (2 Marks) (4 Marks) (3 Marks) (3 Marks) 3.2. Explain Five CVP analysis assumptions and limitations (5 Marks) 4 Page