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Hips & Co produces a product that sells for R40.00 per unit. Variable costs to manufacture the unit amount to R30.00 per unit. Fixed costs
Hips & Co produces a product that sells for R40.00 per unit. Variable costs to manufacture the unit amount to R30.00 per unit. Fixed costs and expenses are going to amount to R50,000 per period. a) Calculate the break-even point in Sales. b) Calculate the pre-tax profits to be expected on sales of R400,000. c) Calculate the sales required to produce a pre-tax profit of R40,000. d) Calculate the sales revenue required to produce an after tax profit of R20,000 if the tax rate is 25%. e) If the company wished to increase the after tax profit by R5,000 what increase in sale revenue is required? f) If basic salaries to the sales personnel were to be increased by R4,000, calculate the increase in sales that would be required in order to cover the increase. g) The sales manager believes that sales revenue can be increased by R80,000 if he is given additional funds for a sales promotion. What is the maximum amount that he may be allowed to spend so that the company does not lose money on the promotion
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