Reference no: EM132170140

Question - Tswane Manufacturing supplies you with the following profit or loss income statement: Marginal profit or loss statement for the year ended 30 September 2017 R'000

Sales (600 000 units @ R20 each) 12 000

Variable costs of goods sold (600 000 @ R12) (7 200)

Manufacturing profit 4 800

Variable selling costs (600 000 @ R1.20) (720)

Marginal income 4 080

Fixed costs (3 536)

Manufacturing costs 2 160

Selling cost 500

Administration costs 876

Profit 544

Required:

1. Calculate the enterprise's break-even quantity in units and the sales value for 2017.

2. What is the enterprise's margin of safety value based on the above profit or loss statement?

3. Calculate the break-even point for 2018 if the fixed costs of Tswane Manufacturing increases by R384 000, and the variable costs decrease by R0, 20 cents per unit.