QUESTION 2 REQUIRED Study the information provided below and answer the following questions independently: 2.1 Calculate the expected total Marginal Income and Net Profit/Loss. 2.2 Calculate the break-even quantity. 2.3 Calculate the break-even value, if the fixed costs are 10% greater than anticipated.
QUESTION 2 REQUIRED Study the information provided below and answer the following questions independently: 2.1 Calculate the expected total Marginal Income and Net Profit/Loss. 2.2 Calculate the break-even quantity. 2.3 Calculate the break-even value, if the fixed costs are 10% greater than anticipated.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please answer questions 2.1 , 2.2 and 2.3
Transcribed Image Text:QUESTION 2
REQUIRED
Study the information provided below and answer the following questions independently:
2.1 Calculate the expected total Marginal Income and Net Profit/Loss.
2.2 Calculate the break-even quantity.
2.3 Calculate the break-even value, if the fixed costs are 10% greater than
anticipated.
2.4 Calculate the number units required to break-even if the selling price is reduced
by R40, and sales commission is calculated at 10% of the selling price.
2.5 Suppose Voltex Manufacturers wants to make provision for an increase in
advertising by R30 000 and a drop in the selling price by R100 per unit, with the
expectation that sales will increase by 400 units. Will profitability improve?
Motivate your answer with the relevant calculations.
INFORMATION
Voltex Manufacturers plans to start Project Beta and the following information is applicable to the
project for the first financial year:
Estimated sales for the financial year
2 000 units
Selling price per unit
R800
Variable manufacturing costs per unit
R420
Fixed manufacturing overheads
R330 000
Fixed selling and administrative expenses
R150 000
Sales commission per unit
R60
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