INFORMATION

Radasys Enterprises is a manufacturer of patio tables. The following information was extracted from the budget for the

year ended $31$ December $2022$:

Required:

$3\mathrm{.}1$ Calculate the total contribution margin and the profit for the year.

$3\mathrm{.}2$ Using the contribution margin ratio calculate the break$-$even value.

$3\mathrm{.}3$ Calculate the margin of safety $($in terms of units$).$

$3\mathrm{.}4$ Calculate the number of units that need to be sold in order to achieve an operating profit of R$1057800.$

$3\mathrm{.}5$ Determine the additional amount that the manufacturer can spend on salaries and still realise an

operating profit of R$600000.$

$3\mathrm{.}6$ Suppose Radasys Enterprises wants to implement a $5\%$ drop in the selling price per unit accompanied by $(4$ Marks$)$

a R$50000$ increase in advertising expense with the expectation that sales volume will increase by $1000$

units. Will profitability improve? Motivate your answer with the relevant calculations.