Management Accounting

Question1

Kara's C.C manufactures only one product. The following information was extracted from the budget of Kara's C.C for the period of July to December 2019.

1. Total production and sales - 2400 units
2. Selling price per unit- R300.00
3. Variable manufacturing cost per unit:

Direct materials- R70.00

Direct labour- R50.00

Overhead- R30.00.

4. Fixed manufacturing overheads- R300000.00

5. Other costs:

Fixed marketing and administrative cost - R200000.00

Sale commission -20% of sales

Using the information provided above, answer the following questions:

i.Calculate the break-even quantity (2 marks)

ii.Calculate the sale value required to achieve a net profit of R250000, using the marginal income ratio (4 marks)

iii.Determine the selling price per unit if a net profit of R724600 is desired. (4 marks)