REQUIRED Use the information given below to calculate each of the following independently: 3.1 Expected total Marginal Income and Net Profit/Loss 3.2 3.3 3.4 3.5 Margin of safety (as a percentage; expressed to two decimal places) Break-even quantity if the selling price drops by 10% Break-even value using the marginal income ratio, if the company spends an additional R435 200 on salaries Selling price per unit that will enable the company to achieve a net profit of R1 500 000 INFORMATION Slumber Limited manufactures beds. The following information was extracted from the budget for 2024: Expected production and sales (units) Selling price per bed Direct materials cost per bed Direct labour cost per bed Variable manufacturing overheads cost per bed Fixed manufacturing overheads cost Sales commission (as a percentage of the selling price) Fixed administrative and selling costs 1 200 R6 000 R1 700 R860 R320 R1 084 800 20% R720 000

REQUIRED Use the information given below to calculate each of the following independently: 3.1 Expected total Marginal Income and Net Profit/Loss 3.2 3.3 3.4 3.5 Margin of safety (as a percentage; expressed to two decimal places) Break-even quantity if the selling price drops by 10% Break-even value using the marginal income ratio, if the company spends an additional R435 200 on salaries Selling price per unit that will enable the company to achieve a net profit of R1 500 000 INFORMATION Slumber Limited manufactures beds. The following information was extracted from the budget for 2024: Expected production and sales (units) Selling price per bed Direct materials cost per bed Direct labour cost per bed Variable manufacturing overheads cost per bed Fixed manufacturing overheads cost Sales commission (as a percentage of the selling price) Fixed administrative and selling costs 1 200 R6 000 R1 700 R860 R320 R1 084 800 20% R720 000

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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Answer the questions from the information provided. 3.1 Use the information provided below to calculate the following independently: Break-even quantity 3.1.1 3.1.2 Margin of safety (in Rands) 3.1.3 The total Marginal Income and Net Profit (Loss), if the selling price is reduced by 10%. 3.1.4 The selling price per unit that will enable the company to achieve a net profit of R480 000. INFORMATION Seata Ltd manufactures chairs. The following information was extracted from the budget for the month ended 31 March 2022: Sales 5 000 units Selling price per unit R300 Variable manufacturing cost per unit R105 Manufacturing overheads (all fixed) R240 000 Selling costs 25% of sales Administrative costs (all fixed) R300 000
QUESTION 2 REQUIRED: Use the information provided below to answer the following questions: 2.1 Calculate the total net profit for the estimated figures. 2.2 Calculate the break-even quantity 23 Calculate the break-even value 2.4 Calculate the break-even value using the marginal income ratio. 2.5 Calculate the target sales volume to achieve a profit of R15 000 000. 2.6 Calculate the new break-even quantity and value if the selling price is increased by 10%. 2.7 Calculate the margin of safety in units at the original budgeted volume and price INFORMATION Kitty Limited plans to manufacture bar fridges. According to the 2020 budget conducted by management, budgeted sales are expected to be R10 000 000 with 5 000 units being produced. The company's direct material and direct labour costs are expected to be 5000 cents and 3500 cents per unit respectively. Whereas, the fixed factory overheads and fixed administrative expenses are budgeted at R450 000 and R200 000 respectively. Furthermore,…
Question 3: Mirbat Company's financial information is given in the table below. Year Sales (OMR) Fixed Costs Variable Costs 2020 445000 105000 245000 2021 500000 150000 280000 You are required to calculate the following values for each year. The years are independent of each other. a) P/V ratio, b) В.Е.Р. c) Sales required to earn a profit of OMR 45000. d) Margin of safety at a profit of OMR 50000 e) Profit when sales are OMR. 300000.
Question 3:salalah Company's financial information is given in the table below. Year 2020 Sales (OMR) Fixed Costs 445000 Variable Costs: 105000 245000 2021 500000 150000 280000 You are required to calculate the following values for each year. The years are independent of each other. a) P/V ratio, b) В.Е.Р. c) Sales required to earn a profit of OMR 45000. d) Margin of safety at a profit of OMR 50000 e) Profit when sales are OMR. 300000.
Question 3: Sohar Company’s financial information is given in the table below. Year Sales (OMR) Fixed Costs Variable Costs 2019 405000 90000 225000 2020 450000 120000 240000 Calculate: P/V ratio, E.P. Sales required to earn a profit of OMR 40000. Margin of safety at a profit of OMR 50000 Profit when sales are OMR. 200000.
Use the information provided below to answer the following questions: 3.1 Calculate the total Marginal Income and Net Profit (Loss). 3.2 Determine the break-even value using the marginal income ratio. 3.3 Use your answer from question 3.2 to calculate the break-even quantity. 3.4 Calculate the margin of safety (in units). 3.5 How many units must be sold to achieve a net profit of R756 000? 3.6 A decrease in the selling price of R10 per unit and a decrease in the fixed costs of R21 600 are expected to increase sales by 300 units. Will profitability improve? Motivate your answer. INFORMATION Temp Ltd manufactures toasters. The following information was extracted from the budget for the year ended 31 December 2022: Sales 5 400 units Selling price per toaster R270 Direct material cost per unit R70 Direct labour cost per unit R40 Variable manufacturing overheads cost per unit R16 Fixed manufacturing overheads cost R288 000 Variable selling and administrative costs per unit R36 Fixed selling…
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1.) refer to the original data. Compute the company's margin of safety in both dollar and percentage terms ? 2.) what is the company's cm ratio? If he company can sell more units thereby increasing sales by $84000 per month and there is no change in fixed expense, by how much would you expect monthly net operating income to increase?
REQUIRED Study the information given below and answer the following questions independently: 3.1 Use the contribution margin ratio to calculate the sales value required to break even. 3.2 Calculate the margin of safety (as a percentage). 3.3 Determine the sales volume required to achieve double the forecast operating profit for 2024. 3.4 Suppose SolarCor Ltd is considering a R50 per unit decrease in the selling price of the product, with the expectation that this would increase the annual sales volume by 25%. Calculate the total Contribution Margin and Operating Profit/Loss. 3.5 Determine the selling price per unit (expressed to the nearest cent) that would enable SolarCor Ltd to break even, if all 30 000 units are produced and sold. INFORMATION SolarCor Ltd produces a single product. The following forecasts for 2024 are available: The budgeted sales are 30 000 units at R800 per unit. Manufacturing costs include direct materials at R160 per unit, direct labour at R100 per unit,…
Assume a consumption function that takes on the following algebraic form: C= 400 + Assume thatY= 7600 what is the level of consumption at this income level. 0.6 Y. Answer: Determine the impact of a decrease in tax of $3 billion on aggregate level of output at equilibrium when the MPS is 0.25 Select one: Oa.-$12 Billion Ob$12 Billion 6s9 Billion ds9 Billion
Q4 From the following data, calculate: (a) PIV Ratio. (b) Profit when sales are OMR 40000. (c) New break-even point if selling price is reduced by 20%. Fixed Expenses OMR 8000. Break-Even point OMR 10000.
Question 3: Sohar Company’s financial information is given in the table below. Year Sales (OMR) Fixed Costs Variable Costs 2019 405000 90000 225000 2020 450000 120000 240000 Calculate: Margin of safety at a profit of OMR 50000 Profit when sales are OMR. 200000.