QUESTION 1: [31] Dhatu makes small plant stands that sell for R25 each. The company's annual level of production and sales is 120,000 units. It has a fixed cost of R589 550 and a variable cost per unit of R12.00 a) Calculate the unit contribution margin in rands and the contribution margin ratio for a plant stand. (3) b) Determine the break-even point in number of plants stands. (2) c) Calculate the rand break-even point using the contribution margin ratio. (2) d) Determine Dhau's margin of safety in units, in sales rands, and as a percentage. (5) e) How many plant stands must the company sell to earn R996 450 in before-tax income? (4) f) If the company wants to earn R657 800 after tax and is subject to a 20 percent tax rate, how many units must be sold? (4) g) How many plant stands must be sold to break even if Dhau's fixed cost increases by R7 865? (4) h) Use the following information and explain that how the reduction in selling price would affect the margin of safety? (7) Particulars Rs. Rs. Selling price per unit 40 Varia cost Material 12 Labor 8 ...... overheads 4 24 Fixed cost is Rs. 8,000. Full capacity of the plant is 5,000 units Reduced selling price is Rs. 32 per unit. QUESTION 2: [21] Dream House Construction Private Limited obtained a tender to construct RDP houses in Polokwane Municipality and because of the company's deteriorating construction equipment, the company purchased new machinery for R235 000. The company incurred transport and installation costs to the tune of R6 500 and R2 500 respectively. The machinery is going to be used for an estimated 8 years after which it will become valueless. Compute the machinery's depreciation schedule using the sum of year's digits method. (Your schedule should show opening carrying value, cost less residual value, depreciation fraction, depreciation amount, accumulated depreciation and closing carrying value for each year) (18) QUESTION 2: [28] a) Steve, at 29 years of age and with a well-paying job feels it's high that he should get married to his long-time girlfriend Miriam. For lobola payments, Steve thinks R50 000 would be enough. If Steve wants to have R50 000 and pay the lobola in 3 years' time, how much should he deposit today in a bank account paying 9% per annum compounded semi-annually? (6) b) You are buying a R150 000 house for 10% deposit, with the rest financed by a bank loan at 14% per annum, compounded monthly for 20 years with fixed monthly payments. What will be your monthly loan payment? (6) c) Maria invested R15 000 for a period of 5 years at an interest rate of 10% per year compounded semi- annually. What amount of interest will she earn on the last 18 months of her investment? (10) d) Sean rents out his three bedrooms flat for R5 000 per month, payable in advance. All his rental proceeds are deposited into a bank account that earns interest at a rate of 11% per annum compounded monthly. If no withdrawals are made from the bank account, what will be Sean's balance on this bank account 8 years from now? (6)