Question $3$

$(25$marks$)$

Call Enterprises produces a single product. The following budgeted information for $2024$ financial year is available:

$\backslash$table$[[$Annual fixed manufacturing costs,R$300000],[$Variable manufacturing cost per unit,R$26],[$Selling price per unit,R$100],[$Marketing costs,$],[$Advertising$,$R$16000$ per month$],[$Sales personnel's salaries and commission,R$20000$ per month plus $6\%$ sales$],[$Administration costs:,$],[$Salaries$,$R$48000$ per month$],[$Other office costs,R$16000$ per month plus R$8$ unit sold$]]$

The number of units expected to be produced and sold during $2024$ is $30000$

Answer each of the following questions independently.

$3\mathrm{.}1$ Calculate the total contribution margin and operating profit $($loss$)$ if all $30000$ units are sold.

$(5$ marks$)$

$3\mathrm{.}2$ Calculate the margin of safety $($as a percentage$)$ for $2024$

$(6$ marks$)$

$3\mathrm{.}3$ Use the contribution margin ratio to calculate the sales value required to achieve an operating profit of R$1200000.$

$(7$marks$)$

$3\mathrm{.}4$ Suppose Callmore Enterprises is considering a R$6$ per unit decrease in the selling price of the product with the expectation that

$(7$marks$)$

this would increase the sales volume by $10\%.$ Is this a good idea? Motivate your answer with the relevant calculations