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Break-even value using the contribution margin ratio

Break-even value using the contribution margin ratio

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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3.1 3.1.1 Calculate each of the following independently from the information provided below: Break-even value using the contribution margin ratio 3.1.2 The increase in operating profit if total sales increase by R60 000 3.1.3 Margin of safety (in units) 3.1.4 Total Contribution Margin and Operating Profit (Loss), if the selling price increases by 10% and advertising costs increase by R20 000 INFORMATION Cook4life Ltd manufactures pots. The following information was extracted from the budget for the month ended 31 December 2022: Expected sales are 3 000 units at R300 per unit. The direct materials cost, direct labour cost and variable manufacturing overheads cost are estimated at R210 000, R150 000 and R90 000 respectively. Fixed manufacturing overheads and fixed administration costs are expected to total R160 000 and R80 000 respectively. Variable selling and administration costs are estimated at 10% of sales.
Transcribed Image Text:3.1 3.1.1 Calculate each of the following independently from the information provided below: Break-even value using the contribution margin ratio 3.1.2 The increase in operating profit if total sales increase by R60 000 3.1.3 Margin of safety (in units) 3.1.4 Total Contribution Margin and Operating Profit (Loss), if the selling price increases by 10% and advertising costs increase by R20 000 INFORMATION Cook4life Ltd manufactures pots. The following information was extracted from the budget for the month ended 31 December 2022: Expected sales are 3 000 units at R300 per unit. The direct materials cost, direct labour cost and variable manufacturing overheads cost are estimated at R210 000, R150 000 and R90 000 respectively. Fixed manufacturing overheads and fixed administration costs are expected to total R160 000 and R80 000 respectively. Variable selling and administration costs are estimated at 10% of sales.
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