Question 4 [42] Busy Body (Pty) Ltd sells protein shakes at R150 per unit. In...
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Question 4 [42] Busy Body (Pty) Ltd sells protein shakes at R150 per unit. In 2022 Busy Body (Pty) Ltd sold 5 500 shakes with a variable cost of R80 per shake. The fixed cost is R110 000. Interest charges for the year were R75 000 and the applicable tax rate is 30%. In 2021 Busy Body sold 5 000 shakes for R140 at a variable cost of R75. The fixed cost and interest charges for 2021 were R115 000 and 50 000, respectively. Busy Body has 20 000 issued ordinary shares and 8 000 issued preference shares. The preference shareholders expect a fixed dividend of R8 per share. Required: 4.1 Calculate Busy Body's earnings per share (EPS) for both the 2021 and 2022 financial years. 4.2 Calculate Busy Body's degree of operating leverage. 4.3 Calculate Busy Body's degree of finance leverage. (24) (11) (7)
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