REQUIRED:

Use the information provided below to answer the following questions independently:

1 If Kempster Limited decides on a profit objective of R400 000 , calculate the target sales volume.

2 Calculate the total Marginal Income and Profit/Loss if the company decides to reduce the selling price to R28 per unit.

 

INFORMATION Kempster Limited expects to incur the following costs to produce and sell 20 000 units of its product at R30 each: Variable manufacturing cost Fixed manufacturing cost Variable marketing cost Fixed marketing and administrative cost R14 per unit R100 000 20% of sales R40 000