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

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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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