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QUESTION 3 {20 Marks} 3.1 REQUIRED Calculate the following from the infonnation provided below: 3.1.1 Breakeven value using the marginal income ratio {4 marks) 31.2
QUESTION 3 {20 Marks} 3.1 REQUIRED Calculate the following from the infonnation provided below: 3.1.1 Breakeven value using the marginal income ratio {4 marks) 31.2 Margin of safety {in units] {4 marks) 3.1.3 Break-even quantity.r if a sales commission of 20% is introduced. {4 marks) INFORMATION Ascot {Ptyji Ltd manufactures a single product and the following budget has been produced by the management accountant: Sales at R250 per unit R1 000 000 Variable costs R600 000 Fixed manufacturing. administrative and marketing costs " R250 000 All the units produced are expected to be sold. 3.2 REQUIRED Use the information provided below to answer the following questions independently: 3.2.1 If Kempster Limited decides on a profit objective of R400 000. calculate the target sales volume. {4 marks) 3.2.2 Calculate the total Marginal Income and Protiti'Loss if the company decides to reduce the selling price to R28 per unit. {4 marks) INFORMATION Kempster Limited expects to incur the following costs to produce and sell 20 000 units of its product at R30 each: Variable manufacturing cost R14 per unit Fixed manufacturing cost R100 000 Variable marketing cost 20% of sales Fixed marketing and administrative cost R40 000
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