Ramapho SA(ltd) mining results Sales . . . . . . . . . . . .
Question:
Ramapho SA(ltd) mining results
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R2,000,000
Variable expenses . . . . . . . . . . . . . . . . . . . . . . . . 786,000
Contribution margin . . . . . . . . . . . . . . . . . . . . . . . 1214,000
Fixed expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 1250,000
Net operating income (loss) . . . . . . . . . . . . . . . . R (36,000)
Area
Mpumalanga Gauteng Northwest
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R 500,000 R 800,000 R 700,000
Variable expenses as a percentage of sales . . . . . . . . . 30% 32% 40%
Traceable fixed expenses . . . . . . . . . . . . . . . . . . . . . R 270,000 R 350,000 R 200,000
The scares resource that drives sales in all the areas are the machine-hours available. To generate R1000 of sales requires one machine-hour. Which area should the company prioritise in the employment of more machine hours to increase their profits?
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer