Limpopo Limited plans to manufacture a new energy efficient outdoor light and the following information is available: The estimated sales for the year 2024 are 5000 units at R30 each. The estimated costs for the 2024 year comprise of direct materials and direct labour of R9 and R2 per unit respectively. Fixed factory overheads are R20 000 per annum, fixed administrative expenses are R23 000 per annum and selling expenses are calculated at 20% of selling price per unit. Required: 1.1 Calculate the breakeven quantity (round off to nearest unit). 1.2 Calculate the breakeven value. 1.3 Calculate the breakeven value using the marginal income ratio. 1.4 Calculate the selling price per unit if the profit per unit is R2 using the sales quantity of 5000 units provided information above. 1.5 Calculate the new breakeven quantity and value if the selling price is decreased by 10% (round off to nearest unit).
Limpopo Limited plans to manufacture a new energy efficient outdoor light and the following information is available: The estimated sales for the year 2024 are 5000 units at R30 each. The estimated costs for the 2024 year comprise of direct materials and direct labour of R9 and R2 per unit respectively. Fixed factory overheads are R20 000 per annum, fixed administrative expenses are R23 000 per annum and selling expenses are calculated at 20% of selling price per unit. Required: 1.1 Calculate the breakeven quantity (round off to nearest unit). 1.2 Calculate the breakeven value. 1.3 Calculate the breakeven value using the marginal income ratio. 1.4 Calculate the selling price per unit if the profit per unit is R2 using the sales quantity of 5000 units provided information above. 1.5 Calculate the new breakeven quantity and value if the selling price is decreased by 10% (round off to nearest unit).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Limpopo Limited plans to manufacture a new energy efficient outdoor light and the following information
is available:
The estimated sales for the year 2024 are 5000 units at R30 each. The estimated costs for the 2024 year
comprise of direct materials and direct labour of R9 and R2 per unit respectively. Fixed factory overheads
are R20 000 per annum, fixed administrative expenses are R23 000 per annum and selling expenses are
calculated at 20% of selling price per unit.
Required:
1.1 Calculate the breakeven quantity (round off to nearest unit).
1.2 Calculate the breakeven value.
1.3 Calculate the breakeven value using the marginal income ratio.
1.4 Calculate the selling price per unit if the profit per unit is R2 using the sales quantity of 5000 units
provided information above.
1.5 Calculate the new breakeven quantity and value if the selling price is decreased by 10% (round off
to nearest unit).
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