Question
A business manufactures one product at a cost of R 175 per unit. The selling price of each unit is R 300. The business has
A business manufactures one product at a cost of R 175 per unit. The selling price of each unit is R 300. The business has fixed monthly costs of R 75 000 per month.
a) What is the gross margin expressed in %. b) What is the monthly break-even production level expressed in number of units? c) What is the monthly break-even sales revenue expressed in Rand? d) How many units need to be sold to earn a monthly profit of R 50 000? e) By what percentage must the sales revenue increase to earn a monthly profit of R 50 000 if the gross margin is reduced by 10 percentage points?
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