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:

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 $-$ R$180000$