3.2 REQUIRED Calculate the following from the information provided below:

3.2.1 The total variable costs if 12 000 units are sold. (2 marks)

3.2.2 The number of units that must be sold to earn a net profit of R120 000, if the selling price is reduced by 10% and the variable cost per unit determined in question 3.2.1 remains unchanged. (4 marks)

INFORMATION

Simplex Limited, which manufactures only one product, provided the following information:

Fixed costs per annum R602 400

Selling price per unit R180

Marginal income per unit R60