QUESTION 4

Use the information given below to calculate the following independently:

4.1 Total Marginal Income and Net Profit/Loss (4 marks)

4.2 Break even value, using the marginal income ratio (4 marks)

4.3 Margin of safety (as a percentage) (4 marks)

4.4 Break-even quantity, if all the manufacturing costs increase by 10% (4 marks) The number of units that must be sold to earn a net profit of R921 500, if the selling price per unit is reduced by 10%. (4 marks)

4.5 The number of units that must be sold to earn a net profit of R921 500, if the selling price per unit is reduced by 10%.

INFORMATION The following information was extracted from the budget of Easywear Limited for the month ended 31 January 2023: Sales 40 000 units Selling price per unit R200 Variable manufacturing costs per unit R100 Variable administration and marketing costs 25% of sales Fixed manufacturing costs R600 000 Fixed administration and marketing costs R400 000