Question: You have been requested to perform a sensitivity analysis for a company manufacturing hand -held sanitisers. An agreement was reached with the relevant union on

You have been requested to perform a sensitivity analysis for a company manufacturing hand -held sanitisers. An agreement was reached with the relevant union on a 6% increase for 2021, and imported chemicals will cost 10% more in 2021. The sales price will be increased by 5% in 2021, however the forecast for sales will remain at 75 000 units.

The following information is available for 2020:-

Cost of plastic containers per unit	R25,00
Cost of imported chemicals per unit	R50,00
Cost of labour per unit	R25,00
Current sales price per unit	R140,00
Forecast sales for 2021	75 000 units

You are required to calculate the Net Profit margins for 2020 and 2021 and comment on your findings

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