Question
Use the information provided below to answer the following questions: 3.1 Calculate the total Marginal Income and Net Profit (Loss). (4 marks) 3.2 Determine the
Use the information provided below to answer the following questions:
3.1 Calculate the total Marginal Income and Net Profit (Loss). (4 marks)
3.2 Determine the break-even value using the marginal income ratio. (4 marks)
3.3 Use your answer from question 3.2 to calculate the break-even quantity. (1 marks)
3.4 Calculate the margin of safety (in units). (3 marks)
3.5 How many units must be sold to achieve a net profit of R756 000? (4 marks)
A decrease in the selling price of R10 per unit and a decrease in the fixed costs of R21 600 are expected to increase sales by 300 units. Will profitability improve? Motivate your answer. (4 marks)
INFORMATION Temp Ltd manufactures toasters.
The following information was extracted from the budget for the year ended 31 December 2022:
Sales 5 400 units Selling price per toaster R270 Direct material cost per unit R70 Direct labour cost per unit R40 Variable manufacturing overheads cost per unit R16 Fixed manufacturing overheads cost R288 000 Variable selling and administrative costs per unit R36 Fixed selling and administrative costs R144 000
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