(20 Marks) QUESTION 3 3. Tommy Manufacturers make bookshelves. The following information was extracted from...
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(20 Marks) QUESTION 3 3. Tommy Manufacturers make bookshelves. The following information was extracted from the budget for the year ended 28 February 2020: 2 000 units R600 Estimated sales for the financial year Selling price per bookshelf Variable production cost per bookshelf: - Direct material - Direct labour - Overheads Fixed production overheads Selling and administrative expenses: - Salary of sales manager for the year - Sales commission: R180 R120 R60 R170 000 R100 000 10% of sales Required Calculate the following (answers correct to the nearest Rand or whole number): The break-even quantity 3.1 (4) 3.2 The break-even value using the marginal income ratio (4) 3.3 The margin of safety in terms of units (3) Consider each of the following situations independently: Calculate the number of sales units required to make a profit of R180 000. 3.4 3.5 Suppose Tommy Manufacturers wants to make provision for a 10% increase in fixed production costs and an increase in variable overhead costs of R20 per unit. Taking these increases into account, calculate the new break-even quantity
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