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MAC2601 Assignment 5 (COMPLETE ANSWERS) Semester 2 2024 - DUE 11 October 2024; 100% TRUSTED Complete, trusted solutions and explanations. R46,55
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MAC2601 Assignment 5 (COMPLETE ANSWERS) Semester 2 2024 - DUE 11 October 2024; 100% TRUSTED Complete, trusted solutions and explanations.

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MAC2601 Assignment 5 (COMPLETE ANSWERS) Semester 2 2024 - DUE 11 October 2024; 100% TRUSTED Complete, trusted solutions and explanations.

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  • October 11, 2024
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  • 2024/2025
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  • mac2601 assignment 5 complete answers semester 2

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, QUESTION 1 (15 Marks) (18 Minutes) Body Lotions (Pty) Ltd manufactures
one type of body lotion. You are provided with the following costing
information for the quarter ended 30 September 2024, which is representative
of a typical quarter for the business: Total Per unit (lotion) R R Sales Less:
Variable costs Contribution Less: Fixed expenses 180 000 Profit 15 000
REQUIRED Marks (a) Calculate the quarterly breakeven point in units and
Rand amount. (4) (b) Determine the contribution margin at breakeven point. (
2 ) (c) Calculate the number of Body lotions that are needed to be sold in each
quarter to generate the quarterly target profit of R60 000. (2) (d) Calculate the
margin of safety in Rand terms and percentage terms for the quarter ended 30
September 2024. (4) (e) By what percentage must Body Lotions increase its
selling price for its profit for the quarter to increase by 100%? (2) (f) Define the
term contribution. (1) Total [15]

Let's break down the solution to the question step-by-step:

Given Information:

 Total sales for the quarter: R180,000R180,000R180,000
 Profit for the quarter: R15,000R15,000R15,000
 Fixed expenses: Unknown, but can be calculated as
Contribution−Profit\text{Contribution} - \text{Profit}Contribution−Profit
 Variable costs: Unknown, but implied in the per-unit contribution margin and can be
calculated from the contribution margin.

(a) Calculate the quarterly breakeven point in units and Rand amount (4 marks)

1. Contribution Margin (CM): The contribution margin is calculated as:

CM=Sales−Variable Costs\text{CM} = \text{Sales} - \text{Variable
Costs}CM=Sales−Variable Costs

Since the profit is given as R15,000R15,000R15,000, and fixed costs can be calculated
from CM−Fixed Costs\text{CM} - \text{Fixed Costs}CM−Fixed Costs, we’ll find the
fixed costs.

Breakeven Point in Units:

Breakeven Point in Units=Fixed CostsContribution per Unit\text{Breakeven Point in
Units} = \frac{\text{Fixed Costs}}{\text{Contribution per
Unit}}Breakeven Point in Units=Contribution per UnitFixed Costs

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