Reference no: EM132662548

Problem 1: Calculate the break-even value using the marginal income ratio.

Problem 2: The sales manager proposes a R2 per unit reduction in selling price with the expectation that this would increase sales by 2 000 units. Is this a good idea?

Problem 3: Determine the selling price per unit if a net profit of R486 000 is desired.

INFORMATION

The following forecasts for January 2021 were provided by Walton's Manufacturers:

Sales (36 000 units) ----------------------------------------R1080 000

Direct materials cost per unit ----------------------------R8

Direct labour cost per unit ---------------------------------R5

Variable manufacturing overhead costs per unit ----------R2

Fixed manufacturing overheads -------------------------------R150 000

Fixed marketing and administrative costs--------------------R120 000

Sales commission ------------------------------R10% OF SALES