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x s/user/AppData/local/Temp/WPDNSE/%7B2DF5AC45-A6F9-1E45-C70B-SAF703044ASP%7D/PGDPM%20-%20Project%20Financial%20Management QUESTION 4 (20 Marks) 4.1 REQUIRED Study the information given below and calculate the following, if the proposal is accepted: 4.1.1 Break-even quantity
x s/user/AppData/local/Temp/WPDNSE/%7B2DF5AC45-A6F9-1E45-C70B-SAF703044ASP%7D/PGDPM%20-%20Project%20Financial%20Management QUESTION 4 (20 Marks) 4.1 REQUIRED Study the information given below and calculate the following, if the proposal is accepted: 4.1.1 Break-even quantity (4 marks) 4.1.2 The number of litres of diesel that must be sold to achieve a profit of R300 000 per month. (4 marks) INFORMATION The output of a project of GHJ Limited is diesel. The diesel is sold at R17.60 per litre and the variable costs total R14 per litre. The fixed costs per month are R272 400. After six months of commencing the project, the sales achieved was 1075 260 litres and the sales were more or less the same volume each month in an attempt to improve performance, the project manager is considering the following proposal Customers (Service stations will be allowed to purchase diesel on credit. It is estimated that 50% of the average monthly sales (in litres) will be to customers who would take advantage of this opportunity. Sales to these customers should increase by 20% Sales volumes to customers who do not take advantage of the credit policy are expected to remain unchanged. Additional costs arising from this proposal are expected to be Selling costs of RO 60 per litre Fixed administrative costs of R15 000 per month 42 REQUIRED Study the information provided below and answer the following questions truth and hand contin LADY pe O x COMPAQ 100
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