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Question 2 (15 marks) The sales manager of your company wants to introduce a new leather handbag in the market He approaches you to assist
Question 2 (15 marks) The sales manager of your company wants to introduce a new leather handbag in the market He approaches you to assist him in calculating the seling price as well as the number of handbags to sell to break-even He provides you with the following information Leather 2 meters per handbag Leather being imported at the cost of R9,200 per 150m roll Labour Cutting and Stitching of material 3 hours per handbag Labour rate is R75,00 per hour R9,500 per month Supervisor salary Import cost R1200 per load of 4 rolls of leather Delivery cost R1,500 per load A load consists of 16 handbags Accountant Salary R8,500 per month Rent R5,000 per month Rent is being allocated according to floor space 75% of the floorspace production department OCcupied by the IS Administration cost R10,500 per month Depreciation The company has 2 (two) sewing machines at the cost of R8,560 per machine Depreciation calculated at 20% per annum on the straight-line IS method Additional notes The company is a price setter and selling prce is calculated as mark-up of 150% on variable cost per unit Tax rate is 30% Required: Calculate the selling price per handbag (7) 2 Calculate the break-even (un number) of handbags to be sold (5) Calculate the number of handbags to be sold f the company wants to earn a profit after tax of 3 10% of the total sales (3)
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