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QUESTION 4 4.1 Study the information given below and answer the following questions independently INFORMATION: Banco Limited produces a single product. The following budgeted information
QUESTION 4 4.1 Study the information given below and answer the following questions independently INFORMATION: Banco Limited produces a single product. The following budgeted information for 2021 is made available: Variable manufacturing costs per unit R85.24 Selling price per unit R246 Fixed manufacturing costs R4 552 000 Marketing Costs R648 000 plus 6% of sales Administration costs R320 000 plus R8 per unit sold The number of units expected to be produced and sold during 2021 is 45 000. 4.1.1 Calculate the expected break-even quantity for 2021 (6 marks) 4.1.2 Calculate the sales volume required to achieve an operating profit of R2 4848 000 (6 marks) 4.1.3 (6 marks) Suppose Banco Limited is considering a decrease of R18 per unit in the selling price of the product, With the expectation that this would increase the sales volume by 10%. Is this a good idea? Motivate your
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