REQUIRED Study the information given below and answer the following questions independently. As far as possible, use the expanded contribution margin model to present your answers. Calculate the break-even Calculate the sales volume required to achieve an operating profit of R2 484 Suppose the management team of Timera Enterprises is considering a decrease of R18 per unit in the selling price of the product, with the expectation that this would increase the sales volume by 12%. Is this a good idea? Motivate your answer with the relevant calculations. *Determine the selling price per unit (expressed to the nearest cent) that will enable Timera Enterprises to break even. INFORMATION Timera Enterprises produces a single product. The following budgeted information for 2022 is available: Expected production and sales 45 000 units Selling price per unit R246 Annual manufacturing costs: Direct materials cost R1 800 000 Direct labour cost R1 350 000 Variable manufacturing overheads cost R505 800 Fixed manufacturing overheads cost R480 000 Marketing costs: Advertising R24 000 per month Sales personnel’s salaries R30 000 per month Sales commission 6% of sales Administration costs: Salaries R72 000 per month Other office costs R248 000 per month plus R12 per unit sold
- REQUIRED
Study the information given below and answer the following questions independently. As far as possible, use the expanded contribution margin model to present your answers.
- Calculate the break-even
- Calculate the sales volume required to achieve an operating profit of R2 484
- Suppose the management team of Timera Enterprises is considering a decrease of R18 per unit in the selling price of the product, with the expectation that this would increase the sales volume by 12%. Is this a good idea? Motivate your answer with the relevant
calculations.
*Determine the selling price per unit (expressed to the nearest cent) that will enable
Timera Enterprises to break even.
INFORMATION
Timera Enterprises produces a single product. The following budgeted information for 2022 is available:
|
Expected production and sales |
45 000 units |
|
Selling price per unit |
R246 |
|
Annual |
|
|
Direct materials cost |
R1 800 000 |
|
Direct labour cost |
R1 350 000 |
|
Variable manufacturing |
R505 800 |
|
Fixed manufacturing overheads cost |
R480 000 |
|
Marketing costs: |
|
|
Advertising |
R24 000 per month |
|
Sales personnel’s salaries |
R30 000 per month |
|
Sales commission |
6% of sales |
|
Administration costs: |
|
|
Salaries |
R72 000 per month |
|
Other office costs |
R248 000 per month plus R12 per unit sold |
REQUIRED
Use the information provided below to estimate the monthly sales revenue at which Sebcom
Limited would break even.
INFORMATION
The expected operating results of Sebcom Limited for two months are summarised as follows:
|
|
January |
February |
|
Sales |
R480 000 |
R560 000 |
|
Operating profit |
R160 000 |
R196 000 |
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