QUESTION 3 3.1 REQUIRED Calculate the following from the information provided below: 3.1.1 Break-even value using the marginal income ratio 3.1.2 Margin of safety (in units) 3.1.3 Break-even quantity if a sales commission of 20% is introduced. (20 Marks) (4 marks) (4 marks) (4 marks) INFORMATION Ascot (Pty) Ltd manufactures a single product and the following budget has been produced by the management accountant: Sales at R250 per unit Variable costs Fixed manufacturing, administrative and marketing costs All the units produced are expected to be sold. 3.2 REQUIRED R1 000 000 R600 000 R250 000 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 Profit/Loss if the company decides to reduce the selling price to R28 per unit. INFORMATION (4 marks) Kempster Limited expects to incur the following costs to produce and sell 20 000 units of its product at R30 each: Variable manufacturing cost Fixed manufacturing cost Variable marketing cost Fixed marketing and administrative cost R14 per unit R100 000 20% of sales R40 000 QUESTION 4 REQUIRED Use the information provided by Empire Traders to prepare the following for March and April 2024: 4.1 Debtors Collection Schedule 4.2 Cash Budget. INFORMATION (20 Marks) (4 marks) (16 marks) The following information was provided by Empire Traders: 1. Empire Traders expects to have a favourable bank balance of R60 000 on 28 February 2024. 2. Budgeted sales figures for 2024 are as follows: January February March Cash sales R320 000 R370 000 R310 000 April R250 000 Credit sales R370 000 R390 000 R320 000 R300 000 3. Thirty percent (30%) of the cash sales is to informal traders who are entitled to a discount of 10%. Collections from debtors are usually as follows: 80% is collected in the month after the sale. 20% is collected two months after the sale. 4. Purchases of inventory are expected to be as follows: January Total purchases R410 000 February R460 000 March April R400 000 R380 000 5. Sixty percent (60%) of the purchases is for cash to take advantage of a discount of 15%. The balance is purchased on credit. Creditors are paid two months after the month of purchase. (Separate entries for cash and credit payments are required.) 6. The proprietor's monthly drawings comprise R12 000 inventory and R10 000 cash. 7. 8. 9. The monthly salaries are expected to amount to R194 400 for April 2024 after an increase of 8% takes effect on 01 April 2024. A fixed deposit, R100 000, will mature (expire) on 31 March 2024. Interest at 12% per annum for three months will also be received. Equipment with a cost price R160 000 will be purchased on 31 March 2024. A deposit 25% will be paid on this date. The balance will be paid in four equal monthly instalments commencing 30 April 2024. 10. Other cash operating expenses are expected to amount to R160 000 for February 2024 and are expected to increase by 5% each month thereafter.