4.1 REQUIRED Study the information given below and calculate the following if the sales manager’s proposal is accepted: 4.1.1 Break-even quantity. 4.1.2 The number of units that must be sold to achieve the company’s profit objective. INFORMATION Sirloin Enterprises manufactures a product that sells for R9 each. The company presently produces and sells 90 000 units per year. Total variable manufacturing costs and selling costs are R405 000 and R81 000 (10% of sales) respectively. Fixed costs are R226 440 for manufacturing overheads and R97 200 for selling and administrative activities. The sales manager has proposed that the price be increased to R10.80 per unit. The company’s profit objective is 10% of sales. 4.2 ENO Ltd, a pharmaceutical company, is seeking finance for the development of a vaccine aimed at reducing the spread the Corona virus. The company is seeking funding only from the public in the form of equity as well as long-term borrowing. In light of the above, critically discuss TWO (2) forms of financing that are available to the company for this project.
4.1
REQUIRED
Study the information given below and calculate the following if the sales manager’s proposal is accepted:
4.1.1 Break-even quantity.
4.1.2 The number of units that must be sold to achieve the company’s profit objective.
INFORMATION
Sirloin Enterprises manufactures a product that sells for R9 each. The company presently produces and sells 90 000 units per year. Total variable
The sales manager has proposed that the price be increased to R10.80 per unit. The company’s profit objective is 10% of sales.
4.2 ENO Ltd, a pharmaceutical company, is seeking finance for the development of a vaccine aimed at reducing the spread the Corona virus. The company is seeking funding only from the public in the form of equity as well as long-term borrowing.
In light of the above, critically discuss TWO (2) forms of financing that are available to the company for this project.
Step by step
Solved in 5 steps
