4.1 Calculate the break-even sales value. 4.2 Calculate the sales volume required to achieve a profit of R 800 000. 4.3 Suppose Exxaro Limited is considering a decrease of 10% per unit in the selling price of the product with the expectation that it would increase sales volume by 10%. Is this a good idea? Motivate your answer with relevant calculations.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Please help with question. It ends at 4.3

MANCOSA: POSTGRADUATE DIPLOMA IN BUSINESS MANAGEMENT
QUESTION 4
Exxarro Llimited is considering pricing and costing for the year ahead. The following data based on expected
production and sales of 15 000 units are provided for analysis:
Variable manufacturing cost
Fixed manufacturing cost
Sales commission
R1 185 000
R510 000
R5 per unit sold
Fixed administration cost
R130 000
Sales
R210 per unit
Study the information provided above and answer the following questions independently:
4.1 Calculate the break-even sales value.
4.2 Calculate the sales volume required to achieve a profit of R 800 000.
4.3 Suppose Exxaro Limited is considering a decrease of 10% per unit in the selling price of the product with the
expectation that it would increase sales volume by 10%. Is this a good idea? Motivate your answer with relevant
calculations.
Transcribed Image Text:MANCOSA: POSTGRADUATE DIPLOMA IN BUSINESS MANAGEMENT QUESTION 4 Exxarro Llimited is considering pricing and costing for the year ahead. The following data based on expected production and sales of 15 000 units are provided for analysis: Variable manufacturing cost Fixed manufacturing cost Sales commission R1 185 000 R510 000 R5 per unit sold Fixed administration cost R130 000 Sales R210 per unit Study the information provided above and answer the following questions independently: 4.1 Calculate the break-even sales value. 4.2 Calculate the sales volume required to achieve a profit of R 800 000. 4.3 Suppose Exxaro Limited is considering a decrease of 10% per unit in the selling price of the product with the expectation that it would increase sales volume by 10%. Is this a good idea? Motivate your answer with relevant calculations.
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