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help please QUESTION5 (20 Marks) Boom Limited has examined the use of a new product which is assumed to improve profitability. You are required to
help please
QUESTION5 (20 Marks) Boom Limited has examined the use of a new product which is assumed to improve profitability. You are required to analyse the following data in order to assist Boom Limited decide on whether or is in fact viable. INFORMATION The data proided is based on expected sales of 15000 units with a selling price per unit of R810. The costs associated with this project includes the folowing: Direct materials cost (R2 700 000). Direct labour cost (R1 800 000), Variable overhead costs (765 000) Fixed manufacturing overhead costs (R702000) and Fixed administrative and selling costs (R167400 In additon, seling commission per unit sold is 10%. REQUIRED Study the information provided below and answer each of the following questions independently 5.1 Calculate the sales quantity and sales value required to break even. 5.2 Based on the expected sales volume of 15 000 units, determine the sales price per unit that will enable the (4 marks) company to break even. 4 marks) 5.3 If sales are 16 000 units, how much can the company spend on additional advertising and achieve an 4 marks) operating proft of R 5 000 000? 5.4 Should management consider a seling price of R830, if the sales volume is expected to decrease by (4 marks) 300units? Motivate your answer showing the relevant calculations 5.5 Suppose more sales persons are employed, thereby increasing fked salaries by R240000bt increasing sales by 500 units.Wll proftability improve? Motvate your answer showing the relevant calculations 4 marks)
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