QUESTION(a) A gold mining company under a CVP analysis reveals a selling price of gold at US$55/g with the following information: Cost ElementDirect MaterialDirect LabourFactory overheadsDistribution overheadsGeneral Administration Overheads TotalVariable cost as a % of sales34.625.412.54.53.080Fixed Cost ($)--200,000 60,000 75,500 335,500 The mining company has budgeted gold sales at 45 Kg Determine:(i) Break-even sales value(ii) The profit at the budgeted sales volume(iii) Profits if actual budgeted sales value drops by 10%(iv) Profits if actual budgeted sales increase by 5% E. Chisakulo MI 441 Mineral Economics Assignment 31 | P a g e(b) Consider the following data from a mining production department involved in dimension stone production. The intention of the mine is to produce and sell its products under the following cost and income structure.Selling price Labour cost Material cost Fixed CostsUS$65/tonne US$9/tonne US$24/tonne US$560,000(i) Calculate the contribution margin per tonne.(ii) Estimate the breakeven point (BEP in tonnes and monetary value.(iii) Determine the variable cost at BEP.(iv) How many tonnes should be sold to realise a profit of US$950,000.(v) How many sold tonnes make a margin of safety of 35%?(vi) Estimate the percentage change noted in the selling price if the BEP increases by 45%while the fixed costs also register a decline of 10%.(vii) draw a table showing VC, TC, FC and Profit/Loss for the quantities ranging from 0 to80,000 at spacing of 5,000 tonnes.(viii) Produce a chart showing the trends of TR, TC , FC and VC and indicate the BEP on thechart(ix) Explain 'economies of scale' highlighting how it occurs in mine production.

QUESTION (a) A gold mining company under a CV? analysis reveals a selling price of gold at US$55/g with the following information: Cost Element Variable cost as a % Fixed Cost (S) of sales Direct Material 34.6 - Direct Labour 25.4 - Factory overheads 12.5 200,000 Distribution overheads 4.5 60,000 General Administration Overheads 3.0 75,500 Total 80 335,500 The mining company has budgeted gold sales at 45 Kg Determine: (i) Break-even sales value (ii) The prot at the budgeted sales volume (iii) Prots if actual budgeted sales value drops by 10% (iv) Prots if actual budgeted sales increase by 5% E. Chfsakulo MI 441 Mineral} Economics Assignment 3 I | P a g e (b) Consider the following data from a mining production department involved in dimension stone production. The intention of the mine is to produce and sell its products under the following cost and income structure. Selling price US$65/tonne Labour cost US$9/tonne Material cost US$24/tonne Fixed Costs US$560,000 (i) Calculate the contribution margin per tonne. (ii) Estimate the breakeven point (BEP in tonnes and monetary value. (iii) Determine the variable cost at BEP. (iv) How many tonnes should be sold to realise a prot of US$950,000. (v) How many sold tonnes make a margin of safety of 35%? (vi) Estimate the percentage change noted in the selling price if the BEP increases by 45% while the xed costs also register a decline of [0%. (vii) Prepare a table showing VC, TC, FC and Profit/Loss for the quantities ranging from 0 to 80,000 at spacing of 5,000 tonnes. (viii) Produce a chart showing the trends of TR, TC , FC and VC and indicate the BEP on the chart (ix) Explain 'economies of scale\" highlighting how it occurs in mine production