Tudle Ltd manufactures a product that sells for R30 per unit. Marginal (Variable) costs to manufacture and sell are R16 per unit. Fixed costs and expenses are budgeted at a total of R 54 600 per year.
Required:
1 Analyse the meaning of the term contribution margin. (4)
2 Calculate the break-even value in Rands. (4)
3 Calculate the income to be expected on sales of R240 000. (4)
4 Calculate the sales revenue required to produce net income of R7 000. (4)
5 If fixed costs were to be increased by R 25 760, calculate the increase in sales revenue that
would be required to cover the increase in fixed costs. (5)
6 If the selling price is decreased by 20%, what percentage increase in the number of units sold is necessary to offset this decrease in selling price.