QUESTION 4 [20] 4.1 ABC Fashion is a retail business specializing in shoes. Here...
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Accounting
QUESTION 4 [20]
4.1 ABC Fashion is a retail business specializing in shoes. Here is some information about their operations: Selling Price per Shoe: R150
Variable Cost per Shoe: R80
Fixed Costs: R7,500
4.1.1 How many Shoes does ABC Fashion need to sell to cover their fixed costs? Hint: Calculate the Break Even Point in Units Show all calculations. (5)
4.1.2 What is the minimum sales revenue ABC Fashion must generate to cover their fixed costs? Hint: Calculate the Break Even Point in Revenue using the Margin Contribution Ratio (MCR) Show all calculations. (5)
4.1.3 If ABC Fashion wants to achieve a target profit of R4,500, how many Shoes do they need to sell? Show all calculations.
4.1.4 If ABC Fashion wants to achieve a target profit of R4,500, how much REVENUE would they have to earn? Show all calculations. (5)
Hint: Calculate the target profit in revenue i.e use the Margin Contribution Ratio (MCR)
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