The data provided is based on expected sales of 15000 units with a selling price per...

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The data provided is based on expected sales of 15000 units with a selling price per unit of R810. The costs associated with this project includes the following: Direct materials cost (R2 700 000), Direct labour cost (R1 800 000), Variable overhead costs (765 000). Fixed manufacturing overhead costs (R702000) and Fixed administrative and selling costs (R167400). In addition, selling commission per unit sold is 10%. REQUIRED Study the information provided below and answer each of the following questions independently: 1.1 1.1 Calculate the sales quantity and sales value required to break even Based on the expected sales volume of 15 000 units, determine the sales price per unit that will enable the company to break even. 1.2 1.3 1.4 1.5 If sales are 16 000 units, how much can the company spend on additional advertising and achieve an operating profit of R 5 000 000? Should management consider a selling price of R830, if the sales volume is expected to decrease by 300units? Motivate your answer showing the relevant calculations. Suppose more sales persons are employed, thereby increasing fixed salaries by R240000 but increasing sales by 500 units. Will profitability improve? Motivate your answer showing the relevant calculations. The data provided is based on expected sales of 15000 units with a selling price per unit of R810. The costs associated with this project includes the following: Direct materials cost (R2 700 000), Direct labour cost (R1 800 000), Variable overhead costs (765 000). Fixed manufacturing overhead costs (R702000) and Fixed administrative and selling costs (R167400). In addition, selling commission per unit sold is 10%. REQUIRED Study the information provided below and answer each of the following questions independently: 1.1 1.1 Calculate the sales quantity and sales value required to break even Based on the expected sales volume of 15 000 units, determine the sales price per unit that will enable the company to break even. 1.2 1.3 1.4 1.5 If sales are 16 000 units, how much can the company spend on additional advertising and achieve an operating profit of R 5 000 000? Should management consider a selling price of R830, if the sales volume is expected to decrease by 300units? Motivate your answer showing the relevant calculations. Suppose more sales persons are employed, thereby increasing fixed salaries by R240000 but increasing sales by 500 units. Will profitability improve? Motivate your answer showing the relevant calculations.

Answer rating: 100% (QA)

11 To calculate the sales quantity and sales value required to break even we need to find the contribution margin per unit first Contribution margin per unit Selling price per unit Variable cost per u... View the full answer