QUESTION $1$

$(50$ marks$)$

The logistics and supply chain management environment consists of a range of key areas which requires in depth understanding, analysis and monitoring & control. One of these areas is the financial aspect of logistics and supply chain management, more specifically the Cost$-$Volume$-$Profit $($CVP$)$ approach and breakeven point.

CVP analysis is the study of the effect that changes in variable and fixed costs, sales price and sales volume have on profitability. It is clear that a reduction in volume of units sold, for instance, will have an impact on the profit generated, however the exact amount of the reduction, and consequently impact on profit, is more difficult to assess. Therefore, CVP analysis is a great tool to use in these instances.

The following is the basic financial information for the end of April, $2024,$ for company $"$B$2$B Supply":

$\backslash$table$[[$Equations$],[1.,$Contribution per unit,$=,$Sales price p$/$u$,-,$Variable cost p$/$u$,],[2.,$Total Contribution,$=,$Contribution p$/$u$,x,$No$.$ of units sold,$],[3.,$Break$-$even point $($units$),=,$Fixed cost,$,$Contribution p$/$u$,],[4.,\backslash$table$[[$Break$-$even point$],[($Sales Value$)]],=,\backslash$table$[[$No Units to break$],[$even$]],x,$Sales price p$/$u$,]]$

$\backslash$table$[[$Revenue $(10$ units sold @ R$80$ per unit$),$R$800-00],[$Variable cost per unit,R$25-00],[$Total fixed cost for the month of April,R$330-00]]$

$1\mathrm{.}1$ Using the above information, calculate the total contribution.

$1\mathrm{.}2$ Define the "break$-$even point".

$1\mathrm{.}3$ Calculate the breakeven point in both units and in terms of sales value for the above scenario.

$1\mathrm{.}4$ Graphically illustrate the break$-$even point based on the above information and calculations. Clearly label your graph. $($Note: the graph does not need to be to

$(16)$

scale$).$