Moon (Ltd) manufacture specially treated garden benches. The following information was extracted from the budget for the
Question:
Moon (Ltd) manufacture specially treated garden benches. The following information was extracted from the budget for the year ended 29 February 2016: Estimated sales for the financial year 2 000 units Selling price per garden bench R450 Variable production cost per garden bench: - Direct material - Direct labour - Overheads R135 R90 R45 Fixed production overheads R127 500 Selling and administrative expenses: - Salary of sales manager for the year - Sales commission R75 000 10% of sales Required: (round off answers to the nearest rand or whole number) 3.1 Calculate the break-even quantity. (4 marks) 3.2 Determine the break-even value using the marginal income ratio. (4 marks) 3.3 Calculate the margin of safety (in Rand terms). (4 marks) 3.4 Determine the number of sales units required to make a profit of R150 000. (3 marks) 3.5 Suppose Moon (Ltd) wants to make provision for a 10% increase in fixed production costs and an increase in variable overhead costs of R15 per unit. Calculate the new break-even quantity. (5 marks)
Advanced Accounting
ISBN: 978-0077862220
12th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik