ABC Company is a manufacturer of widgets. The company has provided the following financial information for the year 2023: 

Selling Price per Widget R10 

Direct Materials per Widget R1.50 

Direct Labour per Widget R1.80 

Variable overheads per Widget R0.70 

Fixed cost R20 000 

Expected sales for 2023 10 000 widgets

Required: Calculate the following breakeven and profit-related metrics, providing both the formula and the calculation:

1.1 Breakeven Quantity (in units). 

1.2 Breakeven Value (in rands).

1.3 Margin of Safety (in rands and percentage). 

1.4 Number of Sales Units Required to Achieve a Profit of R15,000. 

1.5 Calculate the new breakeven quantity if the selling price increases to R12 while other factors remain the same. 

Answer rating: 100% (QA)

To calculate the breakeven and profitrelated metrics for ABC Company lets use the provided financial information for the year 2023 11 Breakeven Quanti... View the full answer