Mabco (Pty) Ltd produces a single product that it sells for R50 per unit. Variable costs to
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Question:
Mabco (Pty) Ltd produces a single product that it sells for R50 per unit. Variable costs to manufacture and sell the product amount to R30 per unit. Fixed costs and expenses are budgeted at R74 600 per period.
Answer the following questions:
- Calculate the break-even point in Rands.
- Calculate the pre-tax profit to be expected on sales of R324,000.
- Calculate the sales revenue required to produce a pre-tax profit of R40,000.
- Calculate the sales revenue required to produce an after-tax profit of R37,500 if the tax rate is 28%.
- If the company wishes to increase after-tax profit by R9,000, what increase in sales revenue is required?
- If basic salaries paid to sales personnel were to be increased by R21,000, calculate the increase in sales revenue which would be required to cover the increase.
- The sales manager believes that sales revenue can be increased by R25 000 if he is given additional funds for sales promotion. What is the maximum amount that may be granted so that the company does not lose money with this promotion?
- The sales manager suggests cutting the present selling price by 20%. What percentage increase in the number of units sold would be necessary to offset this decrease in selling price?
Related Book For
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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