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The financial manager of Colatonic Ltd read about the plight of the local child welfare organisation which aimed to supplement its funds by making and
The financial manager of Colatonic Ltd read about the plight of the local child welfare organisation which
aimed to supplement its funds by making and selling cooking bags which can slowcook meals or keep food
warm for long periods. The financial manager approached the board of directors who agreed that the
company should assist the organisation. After discussions with the president and treasurer of the welfare
organisation the following budgeted information for was gathered to assist with trying to improve the
profitability and breakeven quantity for the year:
The fixed and variable manufacturing costs are estimated to be R per annum and R per unit
respectively. The selling price of the cooking bags will be R each. The selling and distribution costs are
expected to total R per month plus of sales. The administration costs are estimated at R per
month plus R per unit sold. cooking bags are expected to be sold.
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