QUESTION $3$

$(20$ Marks$)$

REQUIRED

Study the information given below and answer the following questions independently:

$3\mathrm{.}1$ Use the marginal income ratio to calculate the break$-$even value.

$(4$ marks$)$

$3\mathrm{.}2$ Calculate the sales volume required to achieve a net profit of R$1740000.$

$(4$ marks$)$

$3\mathrm{.}3$ Calculate the total Marginal Income and Net Profit$/$Loss if an increase in advertising expense by R$200000$ is expected to increase sales by $3000$ units.

$(4$ marks$)$

$3\mathrm{.}4$ Calculate the margin of safety $($in units$)$ if the variable manufacturing costs increase by $10\%$ and fixed manufacturing overheads cost increase by R$24450.$

$(4$ marks$)$

$3\mathrm{.}5$ Based on the expected sales volume of $40000$ units, determine the sales price per unit that will allow the company to break even.

$(4$ marks$)$

INFORMATION

Peryton Limited produces only one product. Expected sales are $40000$ units per year and sales price is R$150$ per unit. The relevant costs are as follows:

$\backslash$table$[[,$Unit Variable cost,Total fixed cost$],[$Direct materials,R$30,-],[$Direct labour,R$36,-],[$Manufacturing overheads,R$15,$R$450000],[$Marketing expenses,R$9,$R$150000],[$Administrative expenses,$-,R180000$