You are given the following information for Caratex Garments (Pty) Ltd, for the year ending December 2018.

BWP

Sales 200 000

Variable costs 100 000

Fixed costs 60 000

Required:

Calculate the following:

1. The contribution margin ratio (3 marks)
2. The break- even point (4 marks)
3. The effect of 20% decrease in fixed costs and 10% increase in variable costs on

(a) above. (9 marks)

d. Percentage increase in production to earn the same amount of net profit as in

December 2019 if the selling price is reduced by 10%. (9 marks)