Question
Jabu manufactures and sells Product X. During the most recent financial period, he sold 500 units at R750 each. There were no units of Product
Jabu manufactures and sells Product X. During the most recent financial period, he sold 500 units at R750 each. There were no units of Product X in opening or closing inventory. Sales people are paid a commission of 5% on sales. The following additional information is available for this sales level: Fixed administrative cost per unit R90.00
Total fixed manufacturing overhead R120 000
Total fixed marketing cost R50 000
Direct material usage per product 2 kg
Direct material price per kilogram R14.50
Total direct labour cost R47 500 Required: Compile a marginal income statement to determine the break-even units and break-even value.
(a) Calculate total sales
R300 000 |
R215 000 |
R274 002 |
R374 002 |
None of the above |
(b) Calculate total variable cost
R69 000 |
R69 002 |
R59 000 |
R59 002 |
None of the above |
(c) Calculate total fixed cost
R200 000 |
R215 000 |
R150 000 |
R50 000 |
None of the above |
(d) Calculate net profit
R0 |
R20 000 |
R45 000 |
R15 000 |
None of the above |
e) Calculate breakeven sales units
150 units |
450 units |
500 units |
365.336 units |
None of the above |
(f) What is the margin of safety ratio?
26% |
26.93% |
25.93% |
25% |
None of the above |
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Accounting Information And Equity Valuation Theory, Evidence, And Applications
Authors: Guochang Zhang
1st Edition
1461481597, 9781461481591
