Required: a.Determine the break-even point in units. b.The sales manager believes the company could...
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Accounting
Required: a.Determine the break-even point in units.
b.The sales manager believes the company could increase sales by 8,000 units if advertising expenditures were increased by R22,000. Determine the effect on income if the company increases advertising expenditures.
c. What is the maximum amount the company could pay for advertising if the advertising would increase sales by 8,000 units?
NDLOVU INDUSTRIES PROJECTED INCOME STATEMENT FOR THE CURRENT YEAR ENDING DECEMBER 31 Sales R750,000 Less variable costs: Variable manufacturing costs R280,000 Variable selling costs 120.000 Total variable costs 400.000 Contribution margin R350.000 Less fixed costs: Fixed manufacturing costs R130.000 Fixed selling and administrative costs 80.000 Total fixed costs 210.000 Operating Income (profit) R140,000 The projected income statement was based on sales of 100.000 units. Ndlovu has the capacity to produce 120,000 units during the year
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