Study the information given below and answer the following questions independently: 3.2.1 If Dundee Limited wants to achieve an operating profit of R972 000, calculate the target sales value without using the contribution margin ratio Based on the expected sales volume, what sales price per unit will allow the company to break even? 3.2.2 INFORMATION Dundee Limited is analysing whether its new product will be profitable. The following data is based on expected sales of 40 000 units: Variable manufacturing costs Fixed manufacturing costs Fixed marketing and administrative costs R3 840 000 R1 200 000 R420 000

Study the information given below and answer the following questions independently: 3.2.1 If Dundee Limited wants to achieve an operating profit of R972 000, calculate the target sales value without using the contribution margin ratio Based on the expected sales volume, what sales price per unit will allow the company to break even? 3.2.2 INFORMATION Dundee Limited is analysing whether its new product will be profitable. The following data is based on expected sales of 40 000 units: Variable manufacturing costs Fixed manufacturing costs Fixed marketing and administrative costs R3 840 000 R1 200 000 R420 000

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter10: Forecasting Financial Statement

Section: Chapter Questions

Problem 4QE: Suppose you are analyzing a firm that is successfully executing a strategy that differentiates its...

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REQUIRED Study the information given below and answer the following questions independently: 3.1 Use the contribution margin ratio to calculate the sales value required to break even. 3.2 Calculate the margin of safety (as a percentage). 3.3 Determine the sales volume required to achieve double the forecast operating profit for 2024. 3.4 Suppose SolarCor Ltd is considering a R50 per unit decrease in the selling price of the product, with the expectation that this would increase the annual sales volume by 25%. Calculate the total Contribution Margin and Operating Profit/Loss. 3.5 Determine the selling price per unit (expressed to the nearest cent) that would enable SolarCor Ltd to break even, if all 30 000 units are produced and sold. INFORMATION SolarCor Ltd produces a single product. The following forecasts for 2024 are available: The budgeted sales are 30 000 units at R800 per unit. Manufacturing costs include direct materials at R160 per unit, direct labour at R100 per unit,…
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