QUESTION 2

REQUIRED Use the information provided below to calculate the following independently:

2.1 Total Marginal Income and Net Profit/Loss

2.2 Break-even value

2.3 Selling price per unit that will enable the project to break even

2.4 Total Marginal Income and Net Profit/Loss if the variable manufacturing costs increase

by 5%

2.5 Break-even quantity if the selling price drops by 10%.

INFORMATION

Caprice Limited plans to start Project Midas and the following are the forecasts for 2024:

(20 Marks)

(4 marks) (4 marks) (4 marks)

(4 marks) (4 marks)

Sales Direct materials cost per unit Direct labour cost per unit Variable selling costs per unit Manufacturing overhead costs (all fixed) Fixed selling and administrative costs

50 000 units at R60 per unit R16 R14 10% of the sales price R400 000

R560 000