QUESTION 33.1REQUIREDUse the information provided below to answer the following questions:Calculate the number of units that must be sold to break even.Calculate the number of units that must be sold to achieve a net profit of R675 000.INFORMATIONThe following information was extracted from the budget of a project of Manor Limited for the year ended31 December 2020. Only one product is produced and sold from this project.Estimated sales for the financial yearSelling price per unitDirect materials cost per unitDirect labour cost per unitVariable manufacturing overheads cost per unitFixed manufacturing overhead costsSelling and administrative costs:FixedVariable6 000 unitsR1 800R630R315R180R540 000R270 0007.5% of salesPROGRAMME HANDBOOK: JULY 2020 INTAKEMANCOSA: POSTGRADUATE DIPLOMA IN PROJECT MANAGEMENT3.2REQUIREDUse the information provided below to calculate the following variances. In each case state whether thevariance is favourable or unfavourable.Direct material price varianceDirect material usage varianceDirect labour rate varianceDirect labour efficiency varianceVariable overheads expenditure varianceVariable overheads efficiency varianceINFORMATIONRyobi Ltd uses the standard costing system at one of its projects. The standards and actual information forOctober 2019 for the only product that it manufactures are as follows:StandardsDirect materialSkg @ R8 per kg2 hours @ R42 per hourR6 per labour hour14 000 units per monthDirect labourVariable overheadsNormal productionActual information for October 2019:Direct material used59 000kg at a total cost of RS01 50025 000 hours @ R40 per hourDirect labourVariable overheadsR175 000Production12 000 units manufactured

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QUESTION 3 3.1 Use the information provided below to answer the following questions: REQUIRED Calculate the number of units that must be sold to break even. Calculate the number of units that must be sold to achieve a net profit of R675 000. INFORMATION The following information was extracted from the budget of a project of Manor Limited for the year ended 31 December 2020, Only one product is produced and sold from this project. Estimated sales for the financial year Selling price per unit Direct materials cost per unit Direct labour cost per unit Variable manufacturing overheads cost per unit Fixed manufacturing overhead costs Selling and administrative costs: Fixed Variable 6 000 units R1 800 R630 R315 R180 R540 000 R270 000 7.5% of sales PROGRAMME HANDBOOK: JULY 2020 INTAKE

QUESTION 3 3.1 Use the information provided below to answer the following questions: REQUIRED Calculate the number of units that must be sold to break even. Calculate the number of units that must be sold to achieve a net profit of R675 000. INFORMATION The following information was extracted from the budget of a project of Manor Limited for the year ended 31 December 2020, Only one product is produced and sold from this project. Estimated sales for the financial year Selling price per unit Direct materials cost per unit Direct labour cost per unit Variable manufacturing overheads cost per unit Fixed manufacturing overhead costs Selling and administrative costs: Fixed Variable 6 000 units R1 800 R630 R315 R180 R540 000 R270 000 7.5% of sales PROGRAMME HANDBOOK: JULY 2020 INTAKE

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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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

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