QUESTION 3

(20 Marks)

	REQUIRED
	Study the information given below and answer each of the following questions independently:
3.1	Calculate the total Marginal Income and Net Profit/Loss if all the tables are sold.	(4 marks)
3.2	Calculate the break-even value using the marginal income ratio.	(4 marks)
3.3	Calculate the number of units that must be manufactured and sold if the company wishes to earn a net profit of R390 000.	(4 marks)
3.4	Based on the expected sales volume of 2 500 units, determine the sales price per unit that will enable the company to earn a net profit of R650 000.	(4 marks)
3.5	Calculate the new total Marginal Income if a decrease in the selling price by R100 per unit is expected to increase sales by 400 units.	(4 marks)

	INFORMATION
	Nysa Limited manufactures tables. The following information was extracted from the budget for the year ending 30 June 2018:
1.	Total production and sales		2 500 units
2.	Inventory on 01 July 2017		Nil
2.	Selling price per table		R2 000
3.	Variable production cost per table:
		Direct materials	R250
		Direct labour	R150
		Overheads	R100
4.	Fixed production overhead costs		R240 000
5.	Other costs:
		Fixed marketing and administration	R280 000
		Sales commission	10% of selling price
6.	Inventory on 30 June 2018		Nil