Question
Busta Limited plans to manufacture bar fridges and the following information is applicable: Estimated sales for the year 5 000 units at R3 400 each
Busta Limited plans to manufacture bar fridges and the following information is applicable:
Estimated sales for the year 5 000 units at R3 400 each Estimated costs for the year:
Variable costs Direct Material R520 per unit Direct Labour R350 per unit Variable Manufacturing Cost R110 per unit Selling expenses 6% of selling price per unit sold Factory overheads (all fixed) R625 000 Administrative expenses (all fixed) R462 000 REQUIRED:
1.1 Calculate the total net profit for the estimated figures. (3 marks) 1.2 Calculate the break-even quantity (3 marks) 1.3 Calculate the break-even value (2 marks) 1.4 Calculate the break-even value using the marginal income ratio.
(3 marks) 1.5 Calculate the target sales volume to achieve a profit of R920 500.. (3 marks) 1.6 Calculate the new break-even quantity and value if the selling price is increased by 12% (4 marks) 1.7
Calculate the margin of safety in units at the original budgeted volume and price (2 marks
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