Answer each of the following questions independently. As far as possible use the expanded contribution margin model to present your answers. 2.1Calculate the total Contribution Margin and Operating Profit (Loss) if all 30000 pallets are sold. 2.2Calculate the margin of safety (as a percentage) for 2022 . 2.3 Use the contribution margin ratio to calculate the sales value required to achieve an operating profit of R6 000000 . 2.4 Suppose an additional R300 000 is spent on advertising in order to increase the sales by 3(4 000 pallets. Calculate the number of pallets that need to be produced and sold to breakmarks) even. 2.5 Suppose the management team of Lomax Ltd is considering a R30 per pallet decrease in the selling price with the expectation that this would increase the sales volume by 10\%. Is this a good idea? Motivate your answer with the relevant calculations. 2.6 Determine the selling price per pallet that will enable Lomax Ltd to achieve an operating profit of R3 192000 . INFORMATION Lomax Ltd sells the bricks that it produces in pallets, with each pallet containing 500 bricks. The following budgeted information for 2022 is available: \begin{tabular}{l} The number of pallets that are expected to be produced and sold during 2022 is 30000 . Each \\ pallet is expected to be sold for R500. The direct materials cost per brick is R0.14 whilst the direct \\ labour cost per brick is R0.08. R0.04 per brick goes towards variable manufacturing overheads. \\ Fixed manufacturing overheads are expected to total R1 500000 . Annual advertising and \\ salespersons salaries are estimated at R2 160000 . The salespersons are also entitled to a sales \\ commission of 6%. Fixed administration costs are expected to be R3 840000 whilst other \\ administration costs are estimated at R40 per pallet sold. \\ The management is examining various proposals to assist in decision-making for 2022 . \\ \hline \end{tabular} Use the information given below to answer the following questions: 3.1Prepare the Cash Budget for January, February and March 2022. (22 marks) (3) 3.2Comment on the cash position of the company for the budgeted period. marks) INFORMATION 1. Some of the items in the Statement of Financial Position as at 31 December 2021 of Lomax Ltd are 2. The following forecasts have been made by Lomax Ltd for the first three months of 2022 for the bricks that it produces which are sold in pallets (with each pallet comprising 500 bricks): 2.1 The sales manager anticipates the following credit sales: The bricks are sold at a constant price of R500 per pallet. Ten percent (10\%) of the sales are for cash and the rest is on credit. Debtors pay their accounts one month after the sale is made. 2.2 The cenets of nroduction include the fnllowinn 2.3 The purchases manager expects to purchase materials to manufacture the following number of No inventories of materials are held at the end of each month. 2.4 Sixty percent (60%) of the materials are purchased for cash in order to take advantage of a 5% discount and the balance is purchased on credit. Creditors are paid in the month after the purchase. 2.5 Direct labour costs are incurred in line with production and will be paid during the month in which they are incurred. 2.6 Variable manufacturing overheads are payable in the month in which they are incurred. 2.7 Fixed manufacturing and non-manufacturing costs are expected to amount to R550 000 per month, excluding depreciation of R75 000 per month. These costs are payable in the month in which they are incurred. 2.8 The sales commission of 6% is payable in the month in which it is incurred. 2.9 Additional administration costs of R40 per unit sold are payable in the month in which they are incurred. 2.10 The company will invest 10% of the total sales for March in a notice deposit account on 31 March 2022 2.11 The balance of the current liabilities as at 31 December 2021 will be settled during January 2022. Answer each of the following questions independently. As far as possible use the expanded contribution margin model to present your answers. 2.1Calculate the total Contribution Margin and Operating Profit (Loss) if all 30000 pallets are sold. 2.2Calculate the margin of safety (as a percentage) for 2022 . 2.3 Use the contribution margin ratio to calculate the sales value required to achieve an operating profit of R6 000000 . 2.4 Suppose an additional R300 000 is spent on advertising in order to increase the sales by 3(4 000 pallets. Calculate the number of pallets that need to be produced and sold to breakmarks) even. 2.5 Suppose the management team of Lomax Ltd is considering a R30 per pallet decrease in the selling price with the expectation that this would increase the sales volume by 10\%. Is this a good idea? Motivate your answer with the relevant calculations. 2.6 Determine the selling price per pallet that will enable Lomax Ltd to achieve an operating profit of R3 192000 . INFORMATION Lomax Ltd sells the bricks that it produces in pallets, with each pallet containing 500 bricks. The following budgeted information for 2022 is available: \begin{tabular}{l} The number of pallets that are expected to be produced and sold during 2022 is 30000 . Each \\ pallet is expected to be sold for R500. The direct materials cost per brick is R0.14 whilst the direct \\ labour cost per brick is R0.08. R0.04 per brick goes towards variable manufacturing overheads. \\ Fixed manufacturing overheads are expected to total R1 500000 . Annual advertising and \\ salespersons salaries are estimated at R2 160000 . The salespersons are also entitled to a sales \\ commission of 6%. Fixed administration costs are expected to be R3 840000 whilst other \\ administration costs are estimated at R40 per pallet sold. \\ The management is examining various proposals to assist in decision-making for 2022 . \\ \hline \end{tabular} Use the information given below to answer the following questions: 3.1Prepare the Cash Budget for January, February and March 2022. (22 marks) (3) 3.2Comment on the cash position of the company for the budgeted period. marks) INFORMATION 1. Some of the items in the Statement of Financial Position as at 31 December 2021 of Lomax Ltd are 2. The following forecasts have been made by Lomax Ltd for the first three months of 2022 for the bricks that it produces which are sold in pallets (with each pallet comprising 500 bricks): 2.1 The sales manager anticipates the following credit sales: The bricks are sold at a constant price of R500 per pallet. Ten percent (10\%) of the sales are for cash and the rest is on credit. Debtors pay their accounts one month after the sale is made. 2.2 The cenets of nroduction include the fnllowinn 2.3 The purchases manager expects to purchase materials to manufacture the following number of No inventories of materials are held at the end of each month. 2.4 Sixty percent (60%) of the materials are purchased for cash in order to take advantage of a 5% discount and the balance is purchased on credit. Creditors are paid in the month after the purchase. 2.5 Direct labour costs are incurred in line with production and will be paid during the month in which they are incurred. 2.6 Variable manufacturing overheads are payable in the month in which they are incurred. 2.7 Fixed manufacturing and non-manufacturing costs are expected to amount to R550 000 per month, excluding depreciation of R75 000 per month. These costs are payable in the month in which they are incurred. 2.8 The sales commission of 6% is payable in the month in which it is incurred. 2.9 Additional administration costs of R40 per unit sold are payable in the month in which they are incurred. 2.10 The company will invest 10% of the total sales for March in a notice deposit account on 31 March 2022 2.11 The balance of the current liabilities as at 31 December 2021 will be settled during January 2022