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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

Study the information given below and answer the following questions independentlyINFORMATION:

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.

4.1.1Calculate the expected break- even quantity for 2021 (6 marks)
4.1.2Calculate the sales volume required to achieve an operating profit of R2 4848 000 (6 marks)

4.1.3Suppose 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 answer

(6 marks)

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