MANCOSA: BBA YEAR 2 52 QUESTION 3 3.1 REQUIRED (20) Use the information provided below to calculate the following 3.1.1 Break-even quantity if neither proposal is implemented 3.1.2 3. The expected total net profit or loss of each proposal. 1.3 Break-even value using the marginal income ratio, if Proposal A is implemented. INFORMATION The following budgeted information for the year ended 30 June 2019 is provided by Citi Ltd, a manufacturer of a single product: R2 400 000 Sales (40 000 units X R60 per unit) R1 440 000 R799 200 R160 800 Total variable costs Total fixed costs Net profit The sales director suggests two proposals to improve the expected net profit: Proposal A: involves launching an improved marketing campaign. This would involve a single additional fixed cost of R40 800 for advertising. Sales commission will increase by R6 per unit. Sales volume is expected to increase by 20% above the budgeted sales of 40 000 units with no change in the unit selling price. Proposal B: involves a 10% reduction in the unit selling price. Fixed selling overheads will be expected to reduce by R120 000. The sales volume is expected to increase to 48 000 units