Question
Maanda For You Ltd is an independent power producer and was recently awarded a large contract by one major electricity supplier. Two maverick brothers, Tom
Maanda For You Ltd is an independent power producer and was recently awarded a large contract by one major electricity supplier. Two maverick brothers, Tom and Tory Capturers, run the company on a full time basis. The company runs two plants, one is manual and the other one is automated. The two brothers appoint specialist technicians on a contract basis. The two Capturers brothers are considering an opportunity to lease expensive machinery that will result in reducing the hours of work required from the specialist technicians.
The following budgeted monthly information is avaible for the two plants.
Manual Automated Fees received for supplying power R450000 R450000
Fixed costs Equipment fees paid R55000 R150000 Maintenance contract R19000 R28000 Rent paid for premises R30000 R30000
Variable costs Direct labour R100000 R50000 Direct materials R70000 R40000 Variable manufacturing overheads R35000 R14000
Calculate the budgeted monthly break even sales value for the manual plant and for automated plant individually.
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