QUESTION ONE [25] Power Ltd manufactures and sells a single product. The budgeted monthly information for the next year is as follows: Sales per month 70 000 units Selling price per unit R5 Variable costs per unit R2 Fixed costs per month (annual / 12) R150 000 Initial investment R2 000 000 Required: 1.1 Calculate the budgeted profit for the year by using cost-volume-profit principles. You do not need to compile the statement of comprehensive income. (5) 1.2 How many units must be sold per year if the company wishes to earn 10% net profit per unit on the initial investment? (5) 1.3 What is the breakeven point in units and in value? (5) 1.4 Using the figures for the year, assume that there is an increase of 10% in fixed costs and an increase to R2.50 per unit in variable costs. Calculate the following: 1.4.1 The breakeven point in value and in units (5) 1.4.2 The margin of safety value and the margin of safety ratio