Question
The information provided below represents the budgeted production and sales data of product X for the forthcoming quarter at Alpha-Beta Inc. INFORMATION Planned sales volume
The information provided below represents the budgeted production and sales data of product X for the forthcoming quarter at Alpha-Beta Inc. INFORMATION Planned sales volume 20 000 units Sales R1 600 000 Direct materials cost R500 000 Direct labour cost R400 000 Variable manufacturing overhead cost R100 000 Fixed manufacturing overhead cost R200 000 Fixed administration and marketing cost R100 000 Variable administration and marketing cost R100 000 Use it to answer each of the following questions independently: 1.1 Calculate the contribution margin per unit. (3 marks) 1.2 Calculate the break-even quantity. (4 marks) 1.3 Calculate the margin of safety (as a percentage) and explain the value obtained. (4 marks) Calculate the selling price per unit that will enable Alpha-Beta Inc. to break even if 16 000 units are sold.
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