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

1.4 Calculate the break-even value using the marginal income ratio.

1.5 Calculate the target sales volume to achieve a profit of R920 500.

1.6 Calculate the new break-even quantity and value if the selling price is increased by 12%

1.7 Calculate the margin of safety in units at the original budgeted volume and price