Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer all questions Question 2 (20 marks) Williams Ltd. manufactures and sells a single product. The selling price is R18. The following information relates

please answer all questions
image text in transcribed
image text in transcribed
Question 2 (20 marks) Williams Ltd. manufactures and sells a single product. The selling price is R18. The following information relates to its yearly production and cost data. (Assume that there is no change to the stock level of the company.) Year 1 2 3 4 Unit Volume 300,000 150,000 420,000 280,000 230,000 120,000 Total Cost (R) 4,000,000 2,800,000 6,600,000 3,900,000 3,200,000 2,100,000 O A 6 Required: 2.1 Based on the above cost and volume data, use the High-Low method to identify variable cost per unit and annual fixed costs for the company. (5) 2.2 On the basis of your answers in part (1) above, calculate the breakeven point of the company in both units and sales revenue. (5) 2.3 The company expects to manufacture and sell 150,000 units this year. Calculate the margin of safety in percentage terms and the operating leverage at the expected sales level.(5) 2.4 The manager of the company has an annual fixed salary of R80,000 and a yearly variable bonus which is equal to 2% of the operating profit. The maximum bonus is 50% of the annual salary. What would be the minimum desired level of sales revenue from the manager's point of view if he wishes to maximise his income

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Susan V. Crosson, Belverd E. Needles

8th Edition

9780618777174, 618777180, 618777172, 978-0618777181

More Books

Students also viewed these Accounting questions

Question

Describe three types of differentiated cells.

Answered: 1 week ago