Consider the information provided below as well as the financial statements and answer the questions that follow. Pearson & Litt is a manufacturing company in the Eastern Cape. Their factory manufactures glass wine bottles for the Blue Valley Beer Co. 2019 2020 Sales price per unit R15 R19 Variable cost per unit R6 R7 Fixed cost (FC) per annum R650 000 R 855 500 Fixed cost per unit R3 R4 Current assets R450 600 R560 700 Current liabilities R510 000 R780 000 Retained profit R21 809 R17 600 Net Sales R2 900 320 R 3 100 100 Cost of sales R390 000 R475 000 b. Recommend one of these budgeting methods to Pearson & Litt and provide reasons for your recommendation (3)
Consider the information provided below as well as the financial statements and answer the questions that follow. Pearson & Litt is a manufacturing company in the Eastern Cape. Their factory manufactures glass wine bottles for the Blue Valley Beer Co. 2019 2020 Sales price per unit R15 R19 Variable cost per unit R6 R7 Fixed cost (FC) per annum R650 000 R 855 500 Fixed cost per unit R3 R4 Current assets R450 600 R560 700 Current liabilities R510 000 R780 000 Retained profit R21 809 R17 600 Net Sales R2 900 320 R 3 100 100 Cost of sales R390 000 R475 000 b. Recommend one of these budgeting methods to Pearson & Litt and provide reasons for your recommendation (3)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Consider the information provided below as well as the financial statements and answer the
questions that follow.
Pearson & Litt is a manufacturing company in the Eastern Cape. Their factory manufactures glass
wine bottles for the Blue Valley Beer Co.
2019 2020
Sales price per unit R15 R19
Variable cost per unit R6 R7
Fixed cost (FC) per annum R650 000 R 855 500
Fixed cost per unit R3 R4
Current assets R450 600 R560 700
Current liabilities R510 000 R780 000
Retained profit R21 809 R17 600
Net Sales R2 900 320 R 3 100 100
Cost of sales R390 000 R475 000
b. Recommend one of these budgeting methods to Pearson & Litt and provide
reasons for your recommendation (3)
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