calculate the change in the net profit if sales increase by R600 000 (using the contribution ratio and assuming that the cost behaviour relationship remains the same) management believes that they could increase sales by 30%, if they improve the quality of the product. To increase the quality of the end product, they would increase the variable cost by R4.50 and they would also have to employ an additional quality inspector who is paid R60 000 for the year. Draft a marginal costing statement for next year taking the changes into account. Your statement must include all information in rand totals, per unit as well as percentage. calculate the new breakeven point in units and rands( using the formulae method) advise the company as to whether or not the changes should be implemented Rand total Per unit Percentage Sales(22 500) 1 800 000 80 100% Less total variable cost 1 350 000 60 contribution 450 000 Less; Total fixed cost 360 000
calculate the change in the net profit if sales increase by R600 000 (using the contribution ratio and assuming that the cost behaviour relationship remains the same) management believes that they could increase sales by 30%, if they improve the quality of the product. To increase the quality of the end product, they would increase the variable cost by R4.50 and they would also have to employ an additional quality inspector who is paid R60 000 for the year. Draft a marginal costing statement for next year taking the changes into account. Your statement must include all information in rand totals, per unit as well as percentage. calculate the new breakeven point in units and rands( using the formulae method) advise the company as to whether or not the changes should be implemented Rand total Per unit Percentage Sales(22 500) 1 800 000 80 100% Less total variable cost 1 350 000 60 contribution 450 000 Less; Total fixed cost 360 000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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calculate the change in the net profit if sales increase by R600 000 (using the contribution ratio and assuming that the cost behaviour relationship remains the same)
management believes that they could increase sales by 30%, if they improve the quality of the product. To increase the quality of the end product, they would increase the variable cost by R4.50 and they would also have to employ an additional quality inspector who is paid R60 000 for the year.
Draft a marginal costing statement for next year taking the changes into account. Your statement must include all information in rand totals, per unit as well as percentage.
calculate the new breakeven point in units and rands( using the formulae method)
advise the company as to whether or not the changes should be implemented
| Rand total | Per unit | Percentage | |
| Sales(22 500) | 1 800 000 | 80 | 100% |
| Less total variable cost | 1 350 000 | 60 | |
| contribution | 450 000 | ||
| Less; Total fixed cost | 360 000 | ||
| Net profit | 90 000 |
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