Instructions: All answers must be typed in and workings must be shown

QUESTION 4 4.1 REQUIRED Study the information given below and calculate the following, if the proposal is accepted: 4.1.1 Break-even quantity. 4.1.2 The number of litres of diesel that must be sold to achieve a profit of R300 000 per month. INFORMATION The output of a project of GHJ Limited is diesel. The diesel is sold at R17.60 per litre and the variable costs total R14 per litre. The fixed costs per month are R272 400. After six months of commencing the project, the sales achieved was 1075 260 litres and the sales were more or less the same volume each month. In an attempt to improve performance, the project manager is considering the following proposal: Customers (Service stations) will be allowed to purchase diesel on credit. It is estimated that 50% of the average monthly sales (in litres) will be to customers who would take advantage of this opportunity. Sales to these customers should increase by 20%. Sales volumes to customers who do not take advantage of the credit policy are expected to remain unchanged. Additional costs arising from this proposal are expected to be: Selling costs of R0.60 per litre. Fixed administrative costs of R15 000 per month. 4.2 REQUIRED Study the information provided below and answer the following questions: 4.2.1 Calculate the activity cost rates using activity-based costing (ABC). 4.22 Calculate the total overheads cost per product using the ABC system. INFORMATION Salsa Ltd manufactures two products, viz. Product M and Product N. The enterprise intends implementing the Activity-Based Costing (ABC) system. The budgeted information for 2021 is as follows: R Total overheads: 4 500 000 300 000 Machine set-ups Design costs Other overheads 900 000 3 300 000 Product M Product N Total Units manufactured 1 500 units 13 500 units 15 000 units Machine set-ups 150 set ups 150 set ups 300 set ups Design hours 24 000 hours 6 000 hours 12 000 hours 30 000 hours 60 000 hours Direct labour hours 48 000 hours Other overheads are allocated to individual products on the basis of direct labour hours 4.3 An order obtained was received for the supply of a product which is made at a project of VBN Limited. The material cost of making the product for the order is R20 000. Only 25% of the primary material for the product is available in stock. The material was purchased a year ago for R6 000. If the material is not used it will be scrapped at a price of R2 000. The remaining material has to be purchased at a cost of R14 000. How much is the total relevant cost of the material