QUESTION Marks
REQUIRED
Study the information given below and answer the following questions independently:
Use the marginal income ratio to calculate the breakeven value. marks
Calculate the sales volume required to achieve a net profit of R marks
Calculate the total Marginal Income and Net ProfitLoss if an increase in
advertising expense by R is expected to increase sales by units. marks
Calculate the margin of safety in units if the variable manufacturing costs
increase by and fixed manufacturing overheads cost increase by R marks
Based on the expected sales volume of units, determine the sales price
per unit that will allow the company to break even. marks
INFORMATION
Peryton Limited produces only one product. Expected sales are units per year and sales price
is R per unit. The relevant costs are as follows:
Unit Variable cost Total fixed cost
Direct materials R
Direct labour R
Manufacturing overheads R R
Marketing expenses R R
Administrative expenses R
