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Whitmore Enterprises produces a single product. The following information for 2021 is available: Fixed manufacturing costs R80 000 Variable manufacturing costs per unit R15 Selling

Whitmore Enterprises produces a single product. The following information for 2021 is available:

Fixed manufacturing costs R80 000
Variable manufacturing costs per unit R15
Selling price per unit R30

Marketing costs:

Advertising

Sales personnels salaries and commission

R4 000 per month

R5 000 per month and 10% of sales

Admin costs:

Salaries

Other office costs

R12 000 per month

R4 000 per month plus R2 per unit sold

Number of units produced and sold 15 000

Required:

4.1. Discuss the concept contribution margin. (5)

4.2. Calculate the break-even value in Rands. (5)

4.3. Calculate the income to be expected on sales of R1 200 000. (5)

4.4 Calculate the sales revenue required to produce net income of R7 000. (5)

4.5. If fixed costs were to be increased by R 25 760, calculate the increase in sales revenue that would be required to cover the increase. (5)

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