Hard Knock Manufacturers is responsible for manufacturing one type of cricket bat, the Kookaburra Kahuna. The following costs are applicable for the production of this type of bat:

Cost details

Amount

Factory rent per year

R500 000

Factory machinery rent per year

R300 000

Direct labour per bat

R700

Direct material per bat

R800

Manufacturing overheads per bat

R600

Wages of factory workers per year

R100 000

Each bat is sold to the general public at R4500.00

REQUIRED:

7.1 Calculate the variable cost to manufacture one bat.(3)

7.2 Calculate the total fixed cost to manufacture bats.(3)

7.3 Calculate total cost to manufacture 6000 bats.(3)

7.4 Assume that each bat is sold at R4500, calculate the profit that Hard Knock Manufactures make if they both manufacture and sell 8000 bats.