Question - 15 marks

Mr. Khumalo owns a construction company which builds houses for the RDP. He constructs 20 houses a month and his expenses are as follows:

Building materials: R246 000

Salaries: 60 workers get paid R2000 each

Fixed overheads: R55 000

Variable overheads: R85 000

1. Calculate his Total Production Cost.

2. Calculate his unit cost (for one house).

3. What must he sell each house for in order to break-even?

4. If he sells each house for R50 000, what is his monthly revenue?

5. If he sells each house for R50 000, what is his profit on each house?

6. What is his mark-up % on each house?

7. What is his gross profit % on each house?