Answer ALL the questions that follow.

QUESTION $1(25$ MARKS$)$

REQUIRED

Use the information provided below to calculate the following:

$1\mathrm{.}1$ Break$-$even quantity $(5$ Marks$)$

$1\mathrm{.}2$ Break$-$even value $(2$ Marks$)$

$1\mathrm{.}3$ Expected total Marginal income and Net profit$/$loss$.(4$ Marks$)$

$1\mathrm{.}4$

Answer each of the following questions independently:

Calculate the number of units required to break$-$even if:

$(4$ Marks$)$

$$ the selling price is reduced by R$400,$ and

$$ variable selling and administrative expenses are adjusted to $8\%$ of sales.

$1\mathrm{.}5$ Suppose Bella Manufacturers wants to make provision for an increase of R$70800$

in fixed manufacturing overheads and a decrease in variable manufacturing costs

of R$240$ per unit. Taking these changes into account, calculate the new break$-$even

value.

$(5$ Marks$)$

$1\mathrm{.}6$ What does a high break$-$even point indicate for Bella Manufacturers, and what are

three $(3)$ ways they can improve their break$-$even situation?

$(5$ Marks$)$

INFORMATION

Bella Manufacturers plans to start Project Bella and the following information is applicable to the

project for the first financial year:

Estimated sales for the financial year

Selling price per unit

Variable manufacturing costs per unit

Fixed manufacturing overheads

Fixed selling and administrative expenses

Variable selling and administrative expenses per unit

$3500$ units

R$4000$

R$2700$

R$1400000$

R$600000$

R$300$