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Calculate the margin of safety (as a percentage) for 2018.

Dear Tutor, can you please help to

Calculate the sales value required to break even.

Calculate the margin of safety (as a percentage) for 2018.

Determine the sales volume required to achieve an operating profit of R1 200 000.

Suppose Tiffany Ltd is considering a R20 per unit decrease in the selling price of the product, with the expectation that this would increase annual sales by 25%. Calculate the total Contribution Margin and Operating Profit/Loss.

Determine the variable costs per unit that would enable Tiffany Ltd to break even, if 28 500 units are produced and sold?


INFORMATION

Tiffany Ltd produces a single product. The following budgeted information for 2018 is available:


Selling price per unit R400

Expected sales volume 28 000 units

Fixed manufacturing costs per year R960 000

Variable manufacturing costs per unit R152

Marketing costs:

Advertising and salaries per year R1 296 000

Sales commission 6% of selling price

Administration costs:

Salaries and other fixed costs per year R2 304 000

Variable costs R24 per unit sold


Thanks

Top Answer

Break even point is a point where profit is Zero. That is, where sales matches the expenses incurred.... View the full answer

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