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A lathe machine manufactured by de Vaal Engineering Ltd has a fixed cost of R 1 2 0 , 0 0 0 . The variable

A lathe machine manufactured by de Vaal Engineering Ltd has a fixed cost of R120,000. The
variable cost for manufacturing the lathe machine amounted to R25,000/unit. Given that the
company sold 50 units for the year 2020 and sold each of the lathe machines for R40,000/unit,
calculate the following:
1.1 Break-even sales quantity.
1.2 Break-even sales.
1.3 Draw a fully labelled sketch of the break-even diagram for de Vaal Engineering Ltd.
1.4 Contribution.
1.5 Margin of safety amount using method which makes use of the profit and sales figures. [4]
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