Marginal income statement for July 20.

6 for Mobeen Ltd

Sales (40 000 units X R40 per unit)

Variable cost (40 000 units X R30 per unit)
Marginal income (R10 per unit)
Fixed costs
Net profit
Marginal income (R10 per unit)
Selling Price

Break Even Quantity

Break even Value

Marginal Income ratio

Break even value (Marginal income ratio method)

Target sales volume for R40000

Target sales Value - Method 1 (Profit for R40000)

Target sales value - Method 2 (Profit for R40000)

(using marginal income ratio)

Margin safety (in terms of value)

Margin Safety (in terms of units)

Change in selling price by 10%

Targets a profit of R40000

Break even Quantity

Sales volume to attain a Profit of R40000

Reducing Variable cost by 10%

selling price at R40 and targeted profit is R40000
Break even Quantity

Sales volume required to attain a target profit of

R40000

Increase in Fixed cost by 10%

R200000

Break even Quantity

Sales volume required to attain profit of R40000

Rands

1,600,000.00
(1,200,000.00)
400,000.00
(200,000.00)
200,000.00
10.00
40.00

Total Fixed Cost 200,000.00

Marginal income per unit 10.00 20000

Break even Quantity * Selling price 20000 units *R40 800,000.00

Marginal income X 100 10.00 10 x 100

Sales (Selling price) 1 40.00 40 1

Total Fixed cost 200000

Marginal income ratio 0.25 800000

Fixed cost +Target profit 200000+40000 240000

Marginal income per unit R10 10

Target sales volume*Selling price per unit 24000 units *R40 960000

Fixed cost +Target profit 200000+40000 2400000

Marginal income ratio 25% 0.25

Budgeted sales - Break even sales 1600000-800000 800000

Budgeted sales units -Break even sales units 40000-20000 20000

Present After increase in selling price

Selling price R40 R44
Variable cost per unit R30 R30
Marginal cost per unit R10 R14

Fixed cost 200000 200000

Marginal income per unit 10 14.00
20000 14,285.71
Fixed cost + Target profit (200000+40000) 240000 240000
Marginal income per unit 10 14
24000 17,142.86

Present After increase in Variable price

Selling price R40 R40
Variable cost per unit R30 R27
Marginal cost per unit R10 R13
Fixed Cost 200000 200000
Marginal income per unit 10 13
20000 15,384.62
Fixed cost + Target profit (200000+40000) 240000 240000
R10 10 13
24000 18,461.54
Present After increase in Fixed cost
Selling price R40 R40
Variable cost per unit R30 R30
Marginal cost per unit R10 R10
Fixed Cost 200000 220000
Fixed cost 200000 220000
Marginal income per unit 10 10
20000 22000
Fixed cost +Target Profit (200000+40000) 240000 260000
Marginal income per unit 10 10
24000 26000
Units

Rands

25%

24000 Units

9600000 Rands

Rands

Units

Units

Units
Units

Units

Units

Units
Marginal income statement for 30 June for Nysa limited Rands

Sales (2500 units X R2000 per unit) 5,000,000.00

Variable cost (R250+R150+100=R500*2500 Units) (1,250,000.00)
Sales Commission (R2000*10%=R200*2500 Units) (500,000.00)
Marginal income (R1300 per unit *2500 Units) 3,250,000.00
Total Fixed cost (520,000.00)
Fixed Production and overhead costs (240,000.00)
Fixed marketing and administration (280,000.00)

Net profit 2,730,000.00

Marginal income (R1300 per unit) 1,300.00

Selling Price 2,000.00

Break Even Quantity Total Fixed Cost

Marginal income per unit

Break even Value Break even Quantity * Selling price

Marginal Income ratio Marginal income X 100

Sales (Selling price) 1

Break even value (Marginal income ratio method) Total Fixed cost
Marginal income ratio

Target sales volume for R390,000 Fixed cost +Target profit

Marginal income per unit

Target sales Value - Method 1 (Profit for R650,000) Target sales volume*Selling price per unit

Target sales value - Method 2 (Profit for R650,000) Fixed cost +Target profit
(using marginal income ratio) Marginal income ratio

Margin safety (in terms of value) Budgeted sales - Break even sales

Margin Safety (in terms of units) Budgeted sales units -Break even sales units

Change in selling price by 10%

Targets a profit of R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity
Fixed cost
Marginal income per unit

Sales volume to attain a Profit of R40000 Fixed cost + Target profit (200000+40000)
Marginal income per unit
Reducing Variable cost by 10%
selling price at R40 and targeted profit is R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity Fixed Cost
Marginal income per unit

Sales volume required to attain a target profit of Fixed cost + Target profit (200000+40000)
R40000 R10

Increase in Fixed cost by 10%

R200000 Selling price
Variable cost per unit
Marginal cost per unit
Fixed Cost
Break even Quantity Fixed cost
Marginal income per unit

Sales volume required to attain profit of R40000 Fixed cost +Target Profit (200000+40000)
Marginal income per unit
 Decrease selling price by R100 / Increase units by 400 3.5
3.1 Sales (2900 units X R1900 per unit) 5,510,000.00
Variable cost (R250+R150+100=R500*2900 Units) (1,450,000.00)
Sales Commission (R1900*10%=R190*2900 Units) (551,000.00)
Marginal income (R1210 *2900 units) 3,509,000.00
Total Fixed cost (520,000.00)
Fixed Production and overhead costs (240,000.00)
Fixed marketing and administration (280,000.00)

Net profit 2,989,000.00

Marginal cost per unit 1210 unit

Selling Price 1,900.00

200,000.00
1,300.00 153.85 Units

20000 units *R40 307,692.31 Rands

1,300.00 1300 x 100 1,300.00

2,000.00 2000 1 2000
65% 3.2

520,000.00
0.65 R 800,000.00 Rands

520,000+390,000 910,000.00
1,300.00 1,300.00 700 units

2500 units *R720 1,800,000.00

520,000+650,000 1170000
65% 0.65 1,800,000.00 R 720.00

1600000-800000 800000 Rands

40000-20000 20000 Units

Present After increase in selling price

R40 R44
R30 R30
R10 R14

200000 200000
10 14.00
20000 14,285.71 Units
240000 240000
10 14
 24000 17,142.86 Units

Present After increase in Variable price

R40 R40
R30 R27
R10 R13
200000 200000
10 13
20000 15,384.62 Units
240000 240000
10 13
24000 18,461.54 Units
Present After increase in Fixed cost
R40 R40
R30 R30
R10 R10
200000 220000
200000 220000
10 10
20000 22000 Units
240000 260000
10 10
24000 26000 Units
 3.3

Rands per unit 3.4

Marginal income statement for 30 June for Kivi limited
Total
Sales (150000 Units * 12 months *R3) 5,400,000.00
Variable cost (R1.40 *150000 Units *12 months) (2,520,000.00)
Sales Commission
Marginal income (R1.60 per unit) 2,880,000.00
Total Fixed cost (1,350,000.00)
Fixed Production and overhead costs (1,350,000.00)
Fixed marketing and administration

Net profit 1,530,000.00

Marginal income 1.60

Selling Price 3.00
Variable cost per unit 1.40

Break Even Quantity Total Fixed Cost

Marginal income per unit

Break even Value Break even Quantity * Selling price

Break Even Quantity Total Fixed Cost

Marginal income per unit

Break even Value Break even Quantity * Selling price

Marginal Income ratio Marginal income X 100

Sales (Selling price) 1

Break even value (Marginal income ratio method) Total Fixed cost
Marginal income ratio

Target sales volume for R400000 Fixed cost +Target profit

Marginal income per unit

Target sales Value - Method 1 (Profit for R650,000) Target sales volume*Selling price per unit

Target sales value - Method 2 (Profit for R650,000) Fixed cost +Target profit
(using marginal income ratio) Marginal income ratio

Margin safety (in terms of value) Budgeted sales - Break even sales

Margin Safety (in terms of units) Budgeted sales units -Break even sales units

Change in selling price by 10%

Targets a profit of R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity
Fixed cost
Marginal income per unit

Break even Value Break even Quantity * Selling price

Sales volume to attain a Profit of R40000 Fixed cost + Target profit (200000+40000)
Marginal income per unit

Reducing Variable cost by 10%

selling price at R40 and targeted profit is R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity Fixed Cost
Marginal income per unit

Sales volume required to attain a target profit of Fixed cost + Target profit (200000+40000)
R40000 R10

Increase in Fixed cost by 10%

R200000 Selling price
Variable cost per unit
Marginal cost per unit
Fixed Cost
Break even Quantity Fixed cost
Marginal income per unit

Sales volume required to attain profit of R40000 Fixed cost +Target Profit (200000+40000)
Marginal income per unit
8.5.1 Changes in Fixed cost increase 10% and varaible cost increase 10%
Per unit Totals
R3 Sales (150000 units * 12 * R3 per unit) 5,400,000.00
R1.40 Variable cost (R1.60*150000 units*12 Months) (2,880,000.00)
Sales Commission
R1.60 Marginal income (R1200 per unit) 2,520,000.00
Total Fixed cost (1,485,000.00)
Fixed Production and overhead costs (1,485,000.00)
Fixed marketing and administration

Net profit 1,035,000.00

Marginal cost per unit R 1.40

1800000

1,350,000.00 8.5.2
1.60 843,750.00 Units
8.5.2
844 units *R3 2,531,250.00 Rands

1,485,000.00 8.5.3.1
1.40 1,060,714.29 Units
8.5.3.1
1060,714 units *R3 3,182,142.86 Rands

1.40 1.40
3.00 2000 1 3
47%

520,000.00
0.65 800,000.00 Rands

1485,000+400,000 1,885,000.00
1.40 1.40 R 1,346,428.57

2500 units *R720 1,800,000.00

520,000+650,000 1170000
65% 0.65 1,800,000.00

5400000-3182142 2,217,857.14 Rands

40000-20000 20000 Units

Present After increase in selling price

3.00 R3
1.40 R1.60
1.60 R1.40
 1,350,000.00 1,485,000.00
1.60 1.40
843750 1,060,714.29 Units
1061 units *R3 R 3,182,142.86 Rands

240000 240000 Units

10 14
24000 17,142.86

Present After increase in Variable price

R40 R40
R30 R27
R10 R13
200000 200000 Units
10 13
20000 15,384.62
240000 240000 Units
10 13
24000 18,461.54
Present After increase in Fixed cost
R40 R40
R30 R30
R10 R10
200000 220000
200000 220000 Units
10 10
20000 22000
240000 260000 Units
10 10
24000 26000
8.5.3
Per Unit
R3
R1.60

R1.40
(135,000.00)

unit

Rands per unit

units 8.5.3.3

720.00

8.5.3.2
Marginal income statement for 30 June for Seata LTD. Rands

Sales (5000 units X R300 per unit) 1,500,000.00

Variable cost (R105*5000 Units) (525,000.00)
Selling cost(25% of sales) (375,000.00)
Marginal income (R120 per unit) 600,000.00
Total Fixed cost (540,000.00)
Fixed Production and overhead costs (240,000.00)
Fixed Administrative costs (300,000.00)

Net profit \ Loss 60,000.00

Marginal income (R120 per unit) 120.00

Selling Price 300.00

Break Even Quantity Total Fixed Cost

Marginal income per unit

Break even Value Break even Quantity * Selling price

Marginal Income ratio Marginal income X 100

Sales (Selling price) 1

Break even value (Marginal income ratio method) Total Fixed cost
Marginal income ratio

Target sales volume for R480,000 Fixed cost +Target profit

Marginal income per unit

Target sales Value - Method 1 (Profit for R480,000) Target sales volume*Selling price per unit

Target sales value - Method 2 (Profit for R480,000) Fixed cost +Target profit
(using marginal income ratio) Marginal income ratio

Margin safety (in terms of value) Budgeted sales - Break even sales

Margin Safety (in terms of units) Budgeted sales units -Break even sales units

Change in selling price by 10%

Targets a profit of R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity
Fixed cost
Marginal income per unit

Sales volume to attain a Profit of R40000 Fixed cost + Target profit (200000+40000)
Marginal income per unit
Reducing Variable cost by 10%
selling price at R40 and targeted profit is R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity Fixed Cost
Marginal income per unit

Sales volume required to attain a target profit of Fixed cost + Target profit (200000+40000)
R40000 R10

Increase in Fixed cost by 10%

R200000 Selling price
Variable cost per unit
Marginal cost per unit
Fixed Cost
Break even Quantity Fixed cost
Marginal income per unit

Sales volume required to attain profit of R40000 Fixed cost +Target Profit (200000+40000)
Marginal income per unit
 Only Selling price reduced by 10% 3.1.3
Sales (5000 units X R270 per unit) R 1,350,000.00
Variable cost (R105*5000 Units) (525,000.00)
Selling cost(25% of sales) (375,000.00)
120.00 Marginal income (R1300 per unit) R 450,000.00
Total Fixed cost (540,000.00)
Fixed Production and overhead costs (240,000.00)
Fixed Administrative costs (300,000.00)

Net profit / Loss (90,000.00)

Marginal cost per unit 90.00 unit

Selling price 300 30

540,000.00
120.00 4,500.00 Units 3.1.1

4500 units *R300 1,350,000.00 Rands

120.00 1300 x 100 120.00

300.00 2000 1 300
40%

540,000.00
0.65 830,769.23 Rands

540,000+480,000 1,020,000.00
120.00 120.00 8500 units

8500 units *R120 1,020,000.00 204.00

540,000+480,000 1020000
40% 0.4 2,550,000.00 510.00

1500000-1350000 R 150,000.00 Rands 3.1.2

40000-20000 20000 Units

Present After increase in selling price

R40 R44
R30 R30
R10 R14

200000 200000
10 14.00
20000 14,285.71 Units
240000 240000
10 14
 24000 17,142.86 Units

Present After increase in Variable price

R40 R40
R30 R27
R10 R13
200000 200000
10 13
20000 15,384.62 Units
240000 240000
10 13
24000 18,461.54 Units
Present After increase in Fixed cost
R40 R40
R30 R30
R10 R10
200000 220000
200000 220000
10 10
20000 22000 Units
240000 260000
10 10
24000 26000 Units
3.1.4 - Achieve a net profit of R480000
Sales =Variable costs +Fixed cost+Net profit
5000P= (R105*5000)+(0.25*5000)+R540000+R480000
5000P= R525000+1250P+R540000+R480000
5000P - 1250P = R1545000
3750P= R1545000 412
P = R1545000/3750
P = R412 - Selling price per unit

Rands per unit

Marginal income statement for 30 June for Seata LTD. Rands

Sales (5000 units X R300 per unit) 1,500,000.00

Variable cost (R105*5000 Units) (525,000.00)
Selling cost(25% of sales) (375,000.00)
Marginal income (R120 per unit) 600,000.00
Total Fixed cost (540,000.00)
Fixed Production and overhead costs (240,000.00)
Fixed Administrative costs (300,000.00)

Net profit \ Loss 60,000.00

Marginal income (R120 per unit) 120.00

Selling Price 300.00

Break Even Quantity - Question 1.2 - Proposal A Total Fixed Cost

Marginal income per unit

Break even Value Break even Quantity * Selling price

Marginal Income ratio Marginal income X 100

Sales (Selling price) 1

Break even value (Marginal income ratio method) Total Fixed cost
Marginal income ratio

Target sales volume for R480,000 Fixed cost +Target profit

Marginal income per unit

Target sales Value - Method 1 (Profit for R480,000) Target sales volume*Selling price per unit

Target sales value - Method 2 (Profit for R480,000) Fixed cost +Target profit
(using marginal income ratio) Marginal income ratio

Margin safety (in terms of value) Budgeted sales - Break even sales

Margin Safety (in terms of units) Budgeted sales units -Break even sales units

Change in selling price by 10%

Targets a profit of R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity
Fixed cost
Marginal income per unit

Sales volume to attain a Profit of R40000 Fixed cost + Target profit (200000+40000)
Marginal income per unit
Reducing Variable cost by 10%
selling price at R40 and targeted profit is R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity Fixed Cost
Marginal income per unit

Sales volume required to attain a target profit of Fixed cost + Target profit (200000+40000)
R40000 R10

Increase in Fixed cost by 10%

R200000 Selling price
Variable cost per unit
Marginal cost per unit
Fixed Cost
Break even Quantity Fixed cost
Marginal income per unit

Sales volume required to attain profit of R40000 Fixed cost +Target Profit (200000+40000)
Marginal income per unit
 Proposal A 1.1
Sales (33000 units X R10 per unit) R 330,000.00 3000
Variable cost (33000 units * R5.50) (181,500.00)
Sales commission (33000*R1)
120.00 Marginal income (R4.50*33000 units) R 148,500.00
Total Fixed cost (80,000.00)
Fixed Production and overhead costs (65,000.00)
Advertising (15,000.00)

Net profit / Loss R 68,500.00 31.5% Decrease

Original Profit R 100,000.00 (31,500.00)
Marginal cost per unit 4.50 unit
Selling price R 10.00

R 80,000.00
R 4.50 17,777.78 17778 Units

4500 units *R300 5,333,333.33 Rands

120.00 1300 x 100 120.00

300.00 2000 1 300
40%

540,000.00
0.65 830,769.23 Rands

540,000+480,000 1,020,000.00
120.00 120.00 8500 units

8500 units *R120 1,020,000.00 204.00

540,000+480,000 1020000
40% 0.4 2,550,000.00 510.00

1500000-1350000 -R 3,833,333.33 Rands 3.1.2

40000-20000 20000 Units

Present After increase in selling price

R40 R44
R30 R30
R10 R14

200000 200000
10 14.00
20000 14,285.71 Units
240000 240000
10 14
 24000 17,142.86 Units

Present After increase in Variable price

R40 R40
R30 R27
R10 R13
200000 200000
10 13
20000 15,384.62 Units
240000 240000
10 13
24000 18,461.54 Units
Present After increase in Fixed cost
R40 R40
R30 R30
R10 R10
200000 220000
200000 220000
10 10
20000 22000 Units
240000 260000
10 10
24000 26000 Units
3.1.4 - Achieve a net profit of R480000
Sales =Variable costs +Fixed cost+Net profit
5000P= (R105*5000)+(0.25*5000)+R540000+R480000
5000P= R525000+1250P+R540000+R480000
5000P - 1250P = R1545000
3750P= R1545000 412
P = R1545000/3750
P = R412 - Selling price per unit

Rands per unit

Marginal income statement for 30 June for Seata LTD. Rands

Sales (5000 units X R300 per unit) 1,500,000.00

Variable cost (R105*5000 Units) (525,000.00)
Selling cost(25% of sales) (375,000.00)
Marginal income (R120 per unit) 600,000.00
Total Fixed cost (540,000.00)
Fixed Production and overhead costs (240,000.00)
Fixed Administrative costs (300,000.00)

Net profit \ Loss 60,000.00

Marginal income (R120 per unit) 120.00

Selling Price 300.00

Break Even Quantity - Question 1.2 - Proposal B Total Fixed Cost

Marginal income per unit

Break even Value Break even Quantity * Selling price

Marginal Income ratio Marginal income X 100

Sales (Selling price) 1

Break even value (Marginal income ratio method) Total Fixed cost
Marginal income ratio

Target sales volume for R480,000 Fixed cost +Target profit

Marginal income per unit

Target sales Value - Method 1 (Profit for R480,000) Target sales volume*Selling price per unit

Target sales value - Method 2 (Profit for R480,000) Fixed cost +Target profit
(using marginal income ratio) Marginal income ratio

Margin safety (in terms of value) Budgeted sales - Break even sales

Margin Safety (in terms of units) Budgeted sales units -Break even sales units

Change in selling price by 10%

Targets a profit of R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity
Fixed cost
Marginal income per unit

Sales volume to attain a Profit of R40000 Fixed cost + Target profit (200000+40000)
Marginal income per unit
Reducing Variable cost by 10%
selling price at R40 and targeted profit is R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity Fixed Cost
Marginal income per unit

Sales volume required to attain a target profit of Fixed cost + Target profit (200000+40000)
R40000 R10

Increase in Fixed cost by 10%

R200000 Selling price
Variable cost per unit
Marginal cost per unit
Fixed Cost
Break even Quantity Fixed cost
Marginal income per unit

Sales volume required to attain profit of R40000 Fixed cost +Target Profit (200000+40000)
Marginal income per unit
 Proposal B 1.1
Sales (33000 units X R9 per unit) R 297,000.00
Variable cost (33000 units * R4.50) (148,500.00)

120.00 Marginal income (R4.50*33000 units) R 148,500.00

Total Fixed cost (55,000.00)
Fixed Production and overhead costs (55,000.00)

Net profit / Loss R 93,500.00 6.5% Decrease

Original Profit R 100,000.00 (6,500.00)
Marginal cost per unit 4.50 unit
Selling price R 9.00

R 55,000.00
R 4.50 12,222.22 12223 Units

4500 units *R300 3,666,666.67 Rands

120.00 1300 x 100 120.00

300.00 2000 1 300
40%

540,000.00
0.65 830,769.23 Rands

540,000+480,000 1,020,000.00
120.00 120.00 8500 units

8500 units *R120 1,020,000.00 204.00

540,000+480,000 1020000
40% 0.4 2,550,000.00 510.00

1500000-1350000 -R 2,166,666.67 Rands 3.1.2

40000-20000 20000 Units

Present After increase in selling price

R40 R44
R30 R30
R10 R14

200000 200000
10 14.00
20000 14,285.71 Units
240000 240000
10 14
 24000 17,142.86 Units

Present After increase in Variable price

R40 R40
R30 R27
R10 R13
200000 200000
10 13
20000 15,384.62 Units
240000 240000
10 13
24000 18,461.54 Units
Present After increase in Fixed cost
R40 R40
R30 R30
R10 R10
200000 220000
200000 220000
10 10
20000 22000 Units
240000 260000
10 10
24000 26000 Units
3.1.4 - Achieve a net profit of R480000
Sales =Variable costs +Fixed cost+Net profit
5000P= (R105*5000)+(0.25*5000)+R540000+R480000
5000P= R525000+1250P+R540000+R480000
5000P - 1250P = R1545000
3750P= R1545000 412
P = R1545000/3750
P = R412 - Selling price per unit

You can not breakeven at 12222 units as there is a

decimal that will increase the unit to 12223 units

Rands per unit

Marginal income statement for 30 June for Seata LTD. Rands

Sales (5000 units X R300 per unit) 1,500,000.00

Variable cost (R105*5000 Units) (525,000.00)
Selling cost(25% of sales) (375,000.00)
Marginal income (R120 per unit) 600,000.00
Total Fixed cost (540,000.00)
Fixed Production and overhead costs (240,000.00)
Fixed Administrative costs (300,000.00)

Net profit \ Loss 60,000.00

Marginal income (R120 per unit) 120.00

Selling Price 300.00

Break Even Quantity - Question 1.2 - Proposal C Total Fixed Cost

Marginal income per unit

Break even Value Break even Quantity * Selling price

Marginal Income ratio Marginal income X 100

Sales (Selling price) 1

Break even value (Marginal income ratio method) Total Fixed cost
Marginal income ratio

Target sales volume for R480,000 Fixed cost +Target profit

Marginal income per unit

Target sales Value - Method 1 (Profit for R480,000) Target sales volume*Selling price per unit

Target sales value - Method 2 (Profit for R480,000) Fixed cost +Target profit
(using marginal income ratio) Marginal income ratio

Margin safety (in terms of value) Budgeted sales - Break even sales

Margin Safety (in terms of units) Budgeted sales units -Break even sales units

Change in selling price by 10%

Targets a profit of R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity
Fixed cost
Marginal income per unit

Sales volume to attain a Profit of R40000 Fixed cost + Target profit (200000+40000)
Marginal income per unit
Reducing Variable cost by 10%
selling price at R40 and targeted profit is R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity Fixed Cost
Marginal income per unit

Sales volume required to attain a target profit of Fixed cost + Target profit (200000+40000)
R40000 R10

Increase in Fixed cost by 10%

R200000 Selling price
Variable cost per unit
Marginal cost per unit
Fixed Cost
Break even Quantity Fixed cost
Marginal income per unit

Sales volume required to attain profit of R40000 Fixed cost +Target Profit (200000+40000)
Marginal income per unit
 Proposal C 1.1
Sales (37500 units X R9.50 per unit) R 356,250.00
Variable cost (37500 units * R4.50) (168,750.00) 37500

120.00 Marginal income (R5.00*37500 units) R 187,500.00

Total Fixed cost (65,000.00)
Fixed Production and overhead costs (65,000.00)

Net profit / Loss 122,500.00 22.5% Increase

Original Profit R 100,000.00 R 22,500.00
Marginal cost per unit 5.00 unit
Selling price R 9.50

65,000.00
5.00 13000 Units

4500 units *R300 3,900,000.00 Rands

120.00 1300 x 100 120.00

300.00 2000 1 300
40%

540,000.00
0.65 830,769.23 Rands

540,000+480,000 1,020,000.00
120.00 120.00 8500 units

8500 units *R120 1,020,000.00 204.00

540,000+480,000 1020000
40% 0.4 2,550,000.00 510.00

1500000-1350000 -R 2,400,000.00 Rands 3.1.2

40000-20000 20000 Units

Present After increase in selling price

R40 R44
R30 R30
R10 R14

200000 200000
10 14.00
20000 14,285.71 Units
240000 240000
10 14
 24000 17,142.86 Units

Present After increase in Variable price

R40 R40
R30 R27
R10 R13
200000 200000
10 13
20000 15,384.62 Units
240000 240000
10 13
24000 18,461.54 Units
Present After increase in Fixed cost
R40 R40
R30 R30
R10 R10
200000 220000
200000 220000
10 10
20000 22000 Units
240000 260000
10 10
24000 26000 Units
3.1.4 - Achieve a net profit of R480000
Sales =Variable costs +Fixed cost+Net profit
5000P= (R105*5000)+(0.25*5000)+R540000+R480000
5000P= R525000+1250P+R540000+R480000
5000P - 1250P = R1545000
3750P= R1545000 412
P = R1545000/3750
P = R412 - Selling price per unit

Rands per unit

Marginal income statement for 30 June for BrysanLTD. Rands

Sales (7000 units X R40 per unit) 280,000.00

Variable cost (R14*7000 Units) (98,000.00)
Selling cost(30% of sales) (84,000.00)
Marginal income (R120 per unit) 98,000.00
Total Fixed cost (56,000.00)
Fixed Overhead costs (24,000.00)
Fixed Administrative costs (32,000.00)

Net profit \ Loss 42,000.00

Marginal income (R14 per unit) 14.00

Selling Price 40.00

Break Even Quantity Total Fixed Cost

Marginal income per unit

Break even Value Break even Quantity * Selling price

Marginal Income ratio Marginal income X 100

Sales (Selling price) 1

Break even value (Marginal income ratio method) Total Fixed cost
Marginal income ratio

Target sales volume for R480,000 Fixed cost +Target profit

Marginal income per unit

Target sales Value - Method 1 (Profit for R480,000) Target sales volume*Selling price per unit

Target sales value - Method 2 (Profit for R480,000) Fixed cost +Target profit
(using marginal income ratio) Marginal income ratio

Margin safety (in terms of value) Budgeted sales - Break even sales

Margin Safety (in terms of units) Budgeted sales units -Break even sales units

Change in selling price by 10%

Targets a profit of R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity
Fixed cost
Marginal income per unit

Sales volume to attain a Profit of R40000 Fixed cost + Target profit (200000+40000)
Marginal income per unit
Reducing Variable cost by 10%
selling price at R40 and targeted profit is R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity Fixed Cost
Marginal income per unit

Sales volume required to attain a target profit of Fixed cost + Target profit (200000+40000)
R40000 R10

Increase in Fixed cost by 10%

R200000 Selling price
Variable cost per unit
Marginal cost per unit
Fixed Cost
Break even Quantity Fixed cost
Marginal income per unit

Sales volume required to attain profit of R40000 Fixed cost +Target Profit (200000+40000)
Marginal income per unit
 Let the selling price per unit be represented by P
8.2.4 Achieve a net profit per unit is R2 8.2.4
100% Sales =Variable costs +Fixed cost+Net profit
35% 7000P= (R14*7000)+(0.30*7000)+R56000+(R2*7000)
30% 7000P= R98000+2100P+R56000+R14000 168000
35% 7000P - 2100P = R168000
4900P= R168000
P = R168000/4900 34.28571428571
P = R34.29 - Selling price per unit

56,000.00
14.00 4,000.00 Units

7000 units *R40 160,000.00 Rands

14.00 14.00
40.00 40
35%

56,000.00
35% 160,000.00 Rands

540,000+480,000 1,020,000.00
120.00 120.00 8500

8500 units *R120 1,020,000.00 204.00

540,000+480,000 1020000
40% 0.4 2,550,000.00

1500000-1350000 R 120,000.00 Rands

40000-20000 20000 Units

Present After increase in selling price

R40 R44
R30 R30
R10 R14

200000 200000
10 14.00
20000 14,285.71 Units
240000 240000
10 14
 24000 17,142.86 Units

Present After increase in Variable price

R40 R40
R30 R27
R10 R13
200000 200000
10 13
20000 15,384.62 Units
240000 240000
10 13
24000 18,461.54 Units
Present After increase in Fixed cost
R40 R40
R30 R30
R10 R10
200000 220000
200000 220000
10 10
20000 22000 Units
240000 260000
10 10
24000 26000 Units
8.2.1

8.2.2

8.2.3

units

510.00 Rands per unit

Marginal income statement for 30 June for Aim Ltd Rands
8.3.1
Sales (125000 units X R5 per unit) 625,000.00
Variable cost (125000 units * R4 per unit) (500,000.00)
Selling cost(30% of sales)
Marginal income (R120 per unit) 125,000.00
Total Fixed cost (140,000.00)
Fixed Overhead costs (140,000.00)
Fixed Administrative costs

Net profit \ Loss (15,000.00)

Marginal income (R14 per unit) 1.00

Selling Price R 5.00

Break Even Quantity Total Fixed Cost

Marginal income per unit

Break even Value Break even Quantity * Selling price

Marginal Income ratio Marginal income X 100

Sales (Selling price) 1

Break even value (Marginal income ratio method) Total Fixed cost
Marginal income ratio

Target sales volume for R60,000 Fixed cost +Target profit

Marginal income per unit

Target sales Value - Method 1 (Profit for R60,000) Target sales volume*Selling price per unit

Target sales value - Method 2 (Profit for R480,000) Fixed cost +Target profit
(using marginal income ratio) Marginal income ratio

Margin safety (in terms of value) Budgeted sales - Break even sales

Margin Safety (in terms of units) Budgeted sales units -Break even sales units

Change in selling price by 10%

Targets a profit of R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity
Fixed cost
Marginal income per unit

Sales volume to attain a Profit of R40000 Fixed cost + Target profit (200000+40000)
Marginal income per unit
Reducing Variable cost by 10%
selling price at R40 and targeted profit is R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity Fixed Cost
Marginal income per unit

Sales volume required to attain a target profit of Fixed cost + Target profit (200000+40000)
R40000 R10

Increase in Fixed cost by 10%

R200000 Selling price
Variable cost per unit
Marginal cost per unit
Fixed Cost
Break even Quantity Fixed cost
Marginal income per unit

Sales volume required to attain profit of R40000 Fixed cost +Target Profit (200000+40000)
Marginal income per unit
 Let the selling price per unit be represented by P
8.2.4 Achieve a net profit per unit is R2
100% Sales =Variable costs +Fixed cost+Net profit
7000P= (R14*7000)+(0.30*7000)+R56000+(R2*7000)
7000P= R98000+2100P+R56000+R14000 168000
7000P - 2100P = R168000
4900P= R168000
P = R168000/4900 34.28571428571
P = R34.29 - Selling price per unit

56,000.00
1.00 56,000.00 Units

7000 units *R40 280,000.00 Rands

1.00 14.00
5.00 40
35%

56,000.00
35% 160,000.00 Rands

140000+60000 200,000.00
1.00 1.00 200000

200000 units *R5 1,000,000.00 8.3.3

540,000+480,000 1020000
40% 0.4 2,550,000.00

1500000-1350000 R 345,000.00 Rands

40000-20000 20000 Units

Present After increase in selling price

R40 R44
R30 R30
R10 R14

200000 200000
10 14.00
20000 14,285.71 Units
240000 240000
10 14
 24000 17,142.86 Units

Present After increase in Variable price

R40 R40
R30 R27
R10 R13
200000 200000
10 13
20000 15,384.62 Units
240000 240000
10 13
24000 18,461.54 Units
Present After increase in Fixed cost
R40 R40
R30 R30
R10 R10
200000 220000
200000 220000
10 10
20000 22000 Units
240000 260000
10 10
24000 26000 Units
units 8.3.2

510.00 Rands per unit

Marginal income statement for 30 June for Yashik CC Rands

Sales (6000 units X R82 per unit) 492,000.00

Variable cost (6000 units * R72 per unit) (432,000.00)
Selling cost(30% of sales)
Marginal income (R120 per unit) 60,000.00
Total Fixed cost (36,000.00)
Fixed Overhead costs (36,000.00)
Fixed Administrative costs

Net profit \ Loss 24,000.00

Marginal income (R10 per unit) R 10.00

Selling Price R 82.00

Break Even Quantity Total Fixed Cost

Marginal income per unit

Break even Value Break even Quantity * Selling price

Marginal Income ratio Marginal income X 100

Sales (Selling price) 1

Break even value (Marginal income ratio method) Total Fixed cost
Marginal income ratio

Target sales volume for R60,000 Fixed cost +Target profit

Marginal income per unit

Target sales Value - Method 1 (Profit for R60,000) Target sales volume*Selling price per unit

Target sales value - Method 2 (Profit for R480,000) Fixed cost +Target profit
(using marginal income ratio) Marginal income ratio

Margin safety (in terms of value) Budgeted sales - Break even sales

Margin Safety (in terms of units) Budgeted sales units -Br even sal units

Change in selling price by 10%

Targets a profit of R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity
Fixed cost
Marginal income per unit

Sales volume to attain a Profit of R40000 Fixed cost + Target profit (200000+40000)
Marginal income per unit
Reducing Variable cost by 10%
selling price at R40 and targeted profit is R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity Fixed Cost
Marginal income per unit

Sales volume required to attain a target profit of Fixed cost + Target profit (200000+40000)
R40000 R10

Increase in Fixed cost by 10%

R200000 Selling price
Variable cost per unit
Marginal cost per unit
Fixed Cost
Break even Quantity Fixed cost
Marginal income per unit

Sales volume required to attain profit of R40000 Fixed cost +Target Profit (200000+40000)
Marginal income per unit
 Let the selling price per unit be represented by P
8.2.4 Achieve a net profit per unit is R2
100% Sales =Variable costs +Fixed cost+Net profit
87.80% 2400P= (R564*2400)+(0.05*2400)P+R460,960+0 $ 1,353,600.00
2400P= R1579200+140P+R460,960+0 $ 1,814,560.00
12.20% 2400P - 120P = R168000 120
2280P= R2040160
P = R168000/4900 34.28571428571
P = R34.29 - Selling price per unit
2,660.00

36,000.00
10.00 3,600.00 Units

3600 units *R82 295,200.00 Rands

10.00 10.00
82.00 82
12.20%

56,000.00
12% 459,200.00 Rands

140000+60000 200,000.00
1.00 1.00 200000

200000 units *R5 1,000,000.00

540,000+480,000 1020000
40% 0.4 2,550,000.00

492000-295200 R 196,800.00 8.4.3

6000-3600 2,400.00 8.4.3

Present After increase in selling price

R40 R44
R30 R30
R10 R14

200000 200000
10 14.00
20000 14,285.71 Units
240000 240000
10 14
 24000 17,142.86 Units

Present After increase in Variable price

R40 R40
R30 R27
R10 R13
200000 200000
10 13
20000 15,384.62 Units
240000 240000
10 13
24000 18,461.54 Units
Present After increase in Fixed cost
R40 R40
R30 R30
R10 R10
200000 220000
200000 220000
10 10
20000 22000 Units
240000 260000
10 10
24000 26000 Units
$ 795.86

8.4.2

8.4.2

8.4.1

units

510.00 Rands per unit

 Marginal income statement for 30 June for Multi Vit Ltd

Sales (10000 units X R100 per unit) 1,000,000.00

Variable cost (10000 units * R60 per unit) (600,000.00)
Selling cost(30% of sales)
Marginal income (R120 per unit) 400,000.00
Total Fixed cost (300,000.00)
Fixed Overhead costs (300,000.00)
Fixed Administrative costs

Net profit \ Loss 100,000.00

Marginal income (R10 per unit) R 40.00

Selling Price R 100.00

Break Even Quantity Total Fixed Cost

Marginal income per unit

Break even Value Break even Quantity * Selling price

Marginal Income ratio Marginal income X 100

Sales (Selling price) 1

Break even value (Marginal income ratio method) Total Fixed cost
Marginal income ratio

Target sales volume for R60,000 Fixed cost +Target profit

Marginal income per unit

Target sales Value - Method 1 (Profit for R60,000) Target sales volume*Selling price per unit

Target sales value - Method 2 (Profit for R480,000) Fixed cost +Target profit
(using marginal income ratio) Marginal income ratio

Margin safety (in terms of value) Budgeted sales - Break even sales

Margin Safety (in terms of units) Budgeted sales units -Br even sal units

Change in selling price by 10%

Targets a profit of R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity
Fixed cost
Marginal income per unit

Sales volume to attain a Profit of R40000 Fixed cost + Target profit (200000+40000)
Marginal income per unit
Reducing Variable cost by 10%
selling price at R40 and targeted profit is R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity Fixed Cost
Marginal income per unit

Sales volume required to attain a target profit of Fixed cost + Target profit (200000+40000)
R40000 R10

Increase in Fixed cost by 10%

R200000 Selling price
Variable cost per unit
Marginal cost per unit
Fixed Cost
Break even Quantity Fixed cost
Marginal income per unit

Sales volume required to attain profit of R40000 Fixed cost +Target Profit (200000+40000)
Marginal income per unit
 8.6.2
100% Break - even value for each product
60.00% Vit A Vit B Vit C
R75000*50% R75000*30% R75000*20%
40.00% R 375,000.00 R 225,000.00 R 150,000.00

300,000.00 8.6.1
40.00 7,500.00 Units

7500 units *R82 750,000.00 Rands 8.6.1

400,000.00 400,000.00
1,000,000.00 1000000
40.00% 8.6.1

300,000.00
40% R 750,000.00 8.6.1

140000+60000 200,000.00
1.00 1.00 200000 units

200000 units *R5 1,000,000.00

540,000+480,000 1020000
40% 0.4 2,550,000.00 510.00

492000-295200 R 250,000.00 8.4.3

6000-3600 (1,500.00) 8.4.3

Present After increase in selling price

R40 R44
R30 R30
R10 R14

200000 200000
10 14.00
20000 14,285.71 Units
240000 240000
10 14
 24000 17,142.86 Units

Present After increase in Variable price

R40 R40
R30 R27
R10 R13
200000 200000
10 13
20000 15,384.62 Units
240000 240000
10 13
24000 18,461.54 Units
Present After increase in Fixed cost
R40 R40
R30 R30
R10 R10
200000 220000
200000 220000
10 10
20000 22000 Units
240000 260000
10 10
24000 26000 Units
Rands per unit
Marginal income statement for 2009 for Whitmore EnterprRands

Sales (15000 units X R33 per unit) 495,000.00

Variable cost (R14*15000 Units) (210,000.00)
Selling commission (6% of sales) R1.98 (29,700.00)
Other Office costs (R2 * 15000 units) (30,000.00)
Marginal income (R120 per unit) 225,300.00
Total Fixed cost (105,000.00)
Fixed Manufacturing costs (80,000.00)
Fixed Advertising (4,000.00)
Sales persons Salaries (5,000.00)
Other Office Equipment (4,000.00)
Salaries (12,000.00)

Net profit \ Loss 120,300.00

Marginal income (R15.02 per unit) R 15.02

Selling Price R 33.00

Break Even Quantity Total Fixed Cost

Marginal income per unit

Break even Value Break even Quantity * Selling price

Marginal Income ratio Marginal income X 100

Sales (Selling price) 1

Break even value (Marginal income ratio method) Total Fixed cost
Marginal income ratio

Target sales volume for R60,000 Fixed cost +Target profit

Marginal income per unit

Target sales Value - Method 1 (Profit for R60,000) Target sales volume*Selling price per unit

Target sales value - Method 2 (Profit for R480,000) Fixed cost +Target profit
(using marginal income ratio) Marginal income ratio

Margin safety (in terms of value) Budgeted sales - Break even sales

Margin Safety (in terms of units) Budgeted sales units -Br even sal units

Change in selling price by 10%

Targets a profit of R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity
Fixed cost
 Marginal income per unit

Sales volume to attain a Profit of R40000 Fixed cost + Target profit (200000+40000)
Marginal income per unit

Reducing Variable cost by 10%

selling price at R40 and targeted profit is R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity Fixed Cost
Marginal income per unit

Sales volume required to attain a target profit of Fixed cost + Target profit (200000+40000)
R40000 R10

Increase in Fixed cost by 10%

R200000 Selling price
Variable cost per unit
Marginal cost per unit
Fixed Cost
Break even Quantity Fixed cost
Marginal income per unit

Sales volume required to attain profit of R40000 Fixed cost +Target Profit (200000+40000)
Marginal income per unit
 Sales (16200 units X R30 per unit) 486,000.00 2.2
Variable cost (R14*16200Units) (226,800.00) 1200
Selling commission (6% of sales) (29,160.00)
Other Office costs (R2 * 16200 units) (32,400.00)
Marginal income (R120 per unit) 197,640.00
Total Fixed cost (105,000.00)
Fixed Manufacturing costs (80,000.00)
Fixed Advertising (4,000.00)
Sales persons Salaries (5,000.00)
Other Office Equipment (4,000.00)
Salaries (12,000.00)

Net profit \ Loss 92,640.00

Marginal income (R12.20 per unit) R 12.20

Selling Price R 30.00

105,000.00 2.1
15.02 6,990.68 6991 Units

6991 units*R15.02 105,000.00 Rands

400,000.00 400,000.00
1,000,000.00 1000000
40.00%

300,000.00
40% R 750,000.00

140000+60000 200,000.00
1.00 1.00 200000 units

200000 units *R5 1,000,000.00

540,000+480,000 1020000
40% 0.4 2,550,000.00 510.00

492000-295200 R 390,000.00 8.4.3

6000-3600 (990.68) 8.4.3

Present After increase in selling price

R40 R44
R30 R30
R10 R14

200000 200000
 10 14.00
20000 14,285.71 Units
240000 240000
10 14
24000 17,142.86 Units

Present After increase in Variable price

R40 R40
R30 R27
R10 R13
200000 200000
10 13
20000 15,384.62 Units
240000 240000
10 13
24000 18,461.54 Units
Present After increase in Fixed cost
R40 R40
R30 R30
R10 R10
200000 220000
200000 220000
10 10
20000 22000 Units
240000 260000
10 10
24000 26000 Units
Rands per unit
Marginal income statement for 2009 for Whitmore EnterprRands
Company A
Sales (50000 units X R100 per unit) 5,000,000.00
Variable cost (R80*500000 Units) (4,000,000.00)
Selling commission (6% of sales) R1.98
Other Office costs (R2 * 15000 units)
Marginal income (R120 per unit) 1,000,000.00
Total Fixed cost (500,000.00)
Fixed Manufacturing costs (500,000.00)
Fixed Advertising
Sales persons Salaries
Other Office Equipment
Salaries

Net profit \ Loss 500,000.00

Marginal income (R20 per unit) R 20.00

Selling Price R 100.00

Break Even Quantity - Company A Total Fixed Cost

Marginal income per unit

Break Even Quantity - Company B Total Fixed Cost

Marginal income per unit

The Fixed cost of Company B is 5 times greater than Company A while the marginal in

Break even Value Break even Quantity * Selling price

Marginal Income ratio Marginal income X 100

Sales (Selling price) 1

Break even value (Marginal income ratio method) Total Fixed cost
Marginal income ratio

Target sales volume for R60,000 Fixed cost +Target profit

Marginal income per unit

Target sales Value - Method 1 (Profit for R60,000) Target sales volume*Selling price per unit

Target sales value - Method 2 (Profit for R480,000) Fixed cost +Target profit
(using marginal income ratio) Marginal income ratio

Margin safety (in terms of value) Budgeted sales - Break even sales

Margin Safety (in terms of units) Budgeted sales units -Br even sal units

Change in selling price by 10%

Targets a profit of R40000
 Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity
Fixed cost
Marginal income per unit

Sales volume to attain a Profit of R40000 Fixed cost + Target profit (200000+40000)
Marginal income per unit

Reducing Variable cost by 10%

selling price at R40 and targeted profit is R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity Fixed Cost
Marginal income per unit

Sales volume required to attain a target profit of Fixed cost + Target profit (200000+40000)
R40000 R10

Increase in Fixed cost by 10%

R200000 Selling price
Variable cost per unit
Marginal cost per unit
Fixed Cost
Break even Quantity Fixed cost
Marginal income per unit

Sales volume required to attain profit of R40000 Fixed cost +Target Profit (200000+40000)
Marginal income per unit
 Company B
100.00% Sales (50000 units X R100 per unit) 5,000,000.00
80.00% Variable cost (R40*16200Units) (2,000,000.00)
Selling commission (6% of sales)
Other Office costs (R2 * 16200 units)
20% Marginal income (R120 per unit) 3,000,000.00
Total Fixed cost (2,500,000.00)
Fixed Manufacturing costs (2,500,000.00)
Fixed Advertising
Sales persons Salaries
Other Office Equipment
Salaries

Net profit \ Loss 500,000.00

Marginal income (R60 per unit) R 60.00

Selling Price R 100.00

500,000.00
20.00 25,000.00 Units

2,500,000.00
60.00 41,666.67 41667

Company A while the marginal income per unit is only 3 times greater

6991 units*R15.02 500,000.00 Rands

400,000.00 400,000.00
1,000,000.00 1000000
40.00%

300,000.00
40% R 750,000.00

140000+60000 200,000.00
1.00 1.00 200000

200000 units *R5 1,000,000.00

540,000+480,000 1020000
40% 0.4 2,550,000.00

492000-295200 R 4,500,000.00 8.4.3

6000-3600 (19,000.00) 8.4.3

Present After increase in selling price

R40 R44
R30 R30
R10 R14

200000 200000
10 14.00
20000 14,285.71 Units
240000 240000
10 14
24000 17,142.86 Units

Present After increase in Variable price

R40 R40
R30 R27
R10 R13
200000 200000
10 13
20000 15,384.62 Units
240000 240000
10 13
24000 18,461.54 Units
Present After increase in Fixed cost
R40 R40
R30 R30
R10 R10
200000 220000
200000 220000
10 10
20000 22000 Units
240000 260000
10 10
24000 26000 Units
 100%
40%

60%

3.1

3.1
Units

3.2

Rands per unit

units

510.00
Marginal income statement for 30 June for Seata LTD. Rands
Proposal A
Sales (33000 units X R10 per unit) R 330,000.00
Variable cost (33000 units * R5.50) (181,500.00)

Marginal income (R5.50*33000 units) R 148,500.00

Total Fixed cost (80,000.00)
Fixed Production and overhead costs (65,000.00)
Advertising (15,000.00)

Net profit \ Loss 68,500.00

Original Profit R 100,000.00
Marginal income (R120 per unit) 4.50
Selling Price 300.00

Break Even Quantity - Question 4 - Proposal A Total Fixed Cost

Marginal income per unit

Break Even Quantity - Question 4 - Proposal B Total Fixed Cost

Marginal income per unit

Break Even Quantity - Question 4 - Proposal C Total Fixed Cost

Marginal income per unit

Break even Value Break even Quantity * Selling price

Marginal Income ratio Marginal income X 100

Sales (Selling price) 1

Break even value (Marginal income ratio method) Total Fixed cost
Marginal income ratio

Target sales volume for R480,000 Fixed cost +Target profit

Marginal income per unit

Target sales Value - Method 1 (Profit for R480,000) Target sales volume*Selling price per unit

Target sales value - Method 2 (Profit for R480,000) Fixed cost +Target profit
(using marginal income ratio) Marginal income ratio

Margin safety (in terms of value) Budgeted sales - Break even sales

Margin Safety (in terms of units) Budgeted sales units -Break even sales units

Change in selling price by 10%

Targets a profit of R40000
Selling price
Variable cost per unit
 Marginal cost per unit
Break even Quantity
Fixed cost
Marginal income per unit

Sales volume to attain a Profit of R40000 Fixed cost + Target profit (200000+40000)
Marginal income per unit

Reducing Variable cost by 10%

selling price at R40 and targeted profit is R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity Fixed Cost
Marginal income per unit

Sales volume required to attain a target profit of Fixed cost + Target profit (200000+40000)
R40000 R10

Increase in Fixed cost by 10%

R200000 Selling price
Variable cost per unit
Marginal cost per unit
Fixed Cost
Break even Quantity Fixed cost
Marginal income per unit

Sales volume required to attain profit of R40000 Fixed cost +Target Profit (200000+40000)
Marginal income per unit
 Proposal B 1.1
Sales (33000 units X R9 per unit) R 297,000.00
Variable cost (33000 units * R4.50) (148,500.00)

Marginal income (R5.00*37500 units) R 148,500.00

Total Fixed cost (55,000.00)
Fixed Production and overhead costs (55,000.00)

31.5% Decrease Net profit / Loss 93,500.00 6.5% Decrease

R31500 Decrease Original Profit R 100,000.00 R6500 Decrease
Marginal cost per unit R 4.50
Selling price R 9.00

80,000.00
4.50 17777.7777777778 17 778 Units

55,000.00
4.50 12222.2222222222 12 222 Units

65,000.00
5.00 13000 13000 Units

4500 units *R300 5,333,333.33 Rands

4.50 1300 x 100 120.00

300.00 2000 1 300
40%

540,000.00
0.65 830,769.23 Rands

540,000+480,000 1,020,000.00
120.00 120.00 8500 units

8500 units *R120 1,020,000.00 204.00

540,000+480,000 1020000
40% 0.4 2,550,000.00 510.00

1500000-1350000 -R 5,003,333.33 Rands 3.1.2

40000-20000 20000 Units

Present After increase in selling price

R40 R44
R30 R30
R10 R14

200000 200000
10 14.00
20000 14,285.71 Units
240000 240000
10 14
24000 17,142.86 Units

Present After increase in Variable price

R40 R40
R30 R27
R10 R13
200000 200000
10 13
20000 15,384.62 Units
240000 240000
10 13
24000 18,461.54 Units
Present After increase in Fixed cost
R40 R40
R30 R30
R10 R10
200000 220000
200000 220000
10 10
20000 22000 Units
240000 260000
10 10
24000 26000 Units
 Proposal C 1.1
Sales (37500 units X R9.50 per unit) R 356,250.00
Variable cost (37500 units * R4.50) (168,750.00) 37500

Marginal income (R5.00*37500 units) R 187,500.00

Total Fixed cost (65,000.00)
Fixed Production and overhead costs (65,000.00)

Net profit / Loss 122,500.00 22.5% Increase

Original Profit R 100,000.00 R 22,500.00
Marginal cost per unit 5.00 unit
Selling price R 9.50

Rands per unit

Marginal income statement for 30 June for Seata LTD. Rands
Tambuti Manufacturers - Question 5
Sales (2400 units X R1200 per unit) R 2,880,000.00
Variable cost (2400 units * R288+R192+R96=R576) (1,382,400.00)
Sales commission (5% of Sales) (144,000.00)
Marginal income (R564*2400 units) R 1,353,600.00
Total Fixed cost (360,960.00)
Fixed Production and overhead costs (216,960.00)
Fixed Marketing and Administrative costs (144,000.00)

Net profit \ Loss 992,640.00

Marginal income (R180 per unit) 564.00

Selling Price 1,200.00

Break Even Quantity - Question 5 Total Fixed Cost

Marginal income per unit

Break Even Quantity - 5.5 Total Fixed Cost

Marginal income per unit

Break Even Quantity - Question 4 - Proposal C Total Fixed Cost

Marginal income per unit

Break even Value Break even Quantity * Selling price

Marginal Income ratio Marginal income X 100

Sales (Selling price) 1

Break even value (Marginal income ratio method) Total Fixed cost
Marginal income ratio

Target sales volume for Profit of R298,920 Fixed cost +Target profit
Marginal income per unit

Target sales Value - Method 1 (Profit for R480,000) Target sales volume*Selling price per unit

Target sales value - Method 2 (Profit for R480,000) Fixed cost +Target profit
(using marginal income ratio) Marginal income ratio

Margin safety (in terms of value) Budgeted sales - Break even sales

Margin Safety (in terms of units) Budgeted sales units -Br Ev sales units

Change in selling price by 10%

Targets a profit of R40000
Selling price
Variable cost per unit
 Marginal cost per unit
Break even Quantity
Fixed cost
Marginal income per unit

Sales volume to attain a Profit of R40000 Fixed cost + Target profit (200000+40000)
Marginal income per unit

Reducing Variable cost by 10%

selling price at R40 and targeted profit is R40000
Selling price
Variable cost per unit
Marginal cost per unit
Break even Quantity Fixed Cost
Marginal income per unit

Sales volume required to attain a target profit of Fixed cost + Target profit (200000+40000)
R40000 R10

Increase in Fixed cost by 10%

R200000 Selling price
Variable cost per unit
Marginal cost per unit
Fixed Cost
Break even Quantity Fixed cost
Marginal income per unit

Sales volume required to attain profit of R40000 Fixed cost +Target Profit (200000+40000)
Marginal income per unit
 10% Increase in Fixed Production cost , Increase Variable cost R20
100.00% Sales (2800 units X R1200 per unit) R 3,360,000.00
48% Variable cost (2800 units * R288+R192+R96=R57 (1,612,800.00)
5% Sales commission (5% of Sales) (168,000.00)
47% Marginal income (R564*2800 units) R 1,579,200.00
Total Fixed cost (460,960.00)
Fixed Production and overhead costs (216,960.00)
576 Fixed Marketing and Administrative costs (244,000.00)

Net profit \ Loss 1,118,240.00

Marginal income (R180 per unit) 564.00

Selling Price 1,200.00

270,000.00
564.00 478.723404255319

287,000.00
564.00 508.86524822695 1794

460,960.00
564.00 817.304964539007 13000

817 units *R1200 980,765.96 Rands

564.00 564.00
1,200.00 1200
47%

360,960.00
47.00% 768,000.00 R 900.00

460,960+298,920 759,880.00
564.00 564.00 1347.30496453901

8500 units *R120 1,020,000.00 204.00

540,000+480,000 1020000
40% 0.4 2,550,000.00

1500000-1350000 R 1,899,234.04 Rands

2000-1500 500 Units

Present After increase in selling price

R40 R44
R30 R30
R10 R14

200000 200000
10 14.00
20000 14,285.71 Units
240000 240000
10 14
24000 17,142.86 Units

Present After increase in Variable price

R40 R40
R30 R27
R10 R13
200000 200000
10 13
20000 15,384.62 Units
240000 240000
10 13
24000 18,461.54 Units
Present After increase in Fixed cost
R40 R40
R30 R30
R10 R10
200000 220000
200000 220000
10 10
20000 22000 Units
240000 260000
10 10
24000 26000 Units
 1.1 Proposal C 1.1
100% Sales (37500 units X R9.50 per unit) R 356,250.00
48% Variable cost (37500 units * R4.50) (168,750.00) 37500
5%
47% Marginal income (R5.00*37500 units) R 187,500.00
Total Fixed cost (65,000.00)
17000 Fixed Production and overhead costs (65,000.00)

Net profit / Loss 122,500.00 22.5% Increase

Original Profit R 100,000.00 R 22,500.00
576 Marginal cost per unit 5.00 unit
Selling price R 9.50

Units

Units

Units

5.2
Rands
Rands per unit
5.4
units

510.00

5.3
Marginal income statement for 30 June for Den Limited

Sales (1100 units X R1500 per unit)

Variable cost (1100 units * R786 per unit)
Sales commission (1100 units *R120)
Marginal income (R594 per unit)
Total Fixed cost
Fixed Overhead costs
Fixed Administrative and Marketing cost

Net profit \ Loss

Marginal income (R594 per unit)

Selling Price

Break Even Quantity

Break even Value

Marginal Income ratio

Break even value (Marginal income ratio method)

Target sales volume for R60,000

Target sales Value - Method 1 (Profit for R60,000)

Target sales value - Method 2 (Profit for R480,000)

(using marginal income ratio)

Margin safety (in terms of value)

Margin Safety (in terms of units)

Change in selling price by 10%

Targets a profit of R40000

Break even Quantity

Sales volume to attain a Profit of R40000

Reducing Variable cost by 10%
selling price at R40 and targeted profit is R40000

Break even Quantity

Sales volume required to attain a target profit of

R40000

Increase in Fixed cost by 10%

R200000

Break even Quantity

Sales volume required to attain profit of R40000

Rands

1,650,000.00 5.1.1
(864,600.00)
(132,000.00)
653,400.00
(351,760.00)
(219,760.00)
(132,000.00)

301,640.00

R 594.00
R 1,500.00

Total Fixed Cost 351,760.00

Marginal income per unit 594.00

Break even Quantity * Selling price 3600 units *R82

Marginal income X 100 594.00

Sales (Selling price) 1 1,500.00

Total Fixed cost 56,000.00

Marginal income ratio 12%

Fixed cost +Target profit 140000+60000

Marginal income per unit 1.00

Target sales volume*Selling price per unit 200000 units *R5

Fixed cost +Target profit 540,000+480,000

Marginal income ratio 40%

Budgeted sales - Break even sales 492000-295200

Budgeted sales units -Bre even sale units 1100-592

Present
Selling price R40
Variable cost per unit R30
Marginal cost per unit R10

Fixed cost 200000

Marginal income per unit 10
20000
Fixed cost + Target profit (200000+40000) 240000
Marginal income per unit 10
 24000

Present
Selling price R40
Variable cost per unit R30
Marginal cost per unit R10
Fixed Cost 200000
Marginal income per unit 10
20000
Fixed cost + Target profit (200000+40000) 240000
R10 10
24000
Present
Selling price R40
Variable cost per unit R30
Marginal cost per unit R10
Fixed Cost 200000
Fixed cost 200000
Marginal income per unit 10
20000
Fixed cost +Target Profit (200000+40000) 240000
Marginal income per unit 10
24000
Let the selling price per unit be represented by P
8.2.4 Achieve a net profit per unit is R2
Sales =Variable costs +Fixed cost+Net profit
7000P= (R14*7000)+(0.30*7000)+R56000+(R2*7000)
7000P= R98000+2100P+R56000+R14000 168000
7000P - 2100P = R168000
4900P= R168000
P = R168000/4900 34.28571428571
P = R34.29 - Selling price per unit

5.1.2
592.19 Units

888,282.83 Rands 8.4.2

10.00
82
12.20% 8.4.1

459,200.00 Rands

200,000.00
1.00 200000 units

1,000,000.00

1020000
0.4 2,550,000.00 510.00

R 761,717.17

507.81 508 Units 5.1.2

After increase in selling price

R44
R30
R14

200000
14.00
14,285.71 Units
240000
14
 17,142.86 Units

After increase in Variable price

R40
R27
R13
200000
13
15,384.62 Units
240000
13
18,461.54 Units
After increase in Fixed cost
R40
R30
R10
220000
220000
10
22000 Units
260000
10
26000 Units
Rands per unit
Marginal income statement for 30 June for Den Limited

Sales
Variable cost (R140+60+40)
Sales commission (10%*400)
Marginal income (R594 per unit)
Total Fixed cost
Fixed Overhead costs
Fixed Administrative and Marketing cost

Net profit \ Loss

Marginal income (R120 per unit)

Selling Price

Break Even Quantity

Break Even Quantity

Break even Value

Marginal Income ratio

Break even value (Marginal income ratio method)

Target sales volume for R300,000

Target sales Value - Method 1 (Profit for R60,000)

Target sales value - Method 2 (Profit for R480,000)

(using marginal income ratio)

Margin safety (in terms of value)

Margin Safety (in terms of units)

Change in selling price by 10%

Targets a profit of R40000

Break even Quantity

Sales volume to attain a Profit of R40000

Reducing Variable cost by 10%

selling price at R40 and targeted profit is R40000

Break even Quantity

Sales volume required to attain a target profit of

R40000

Increase in Fixed cost by 10%

R200000

Break even Quantity

Sales volume required to attain profit of R40000

Rands

400.00 5.2.1
(240.00)
(40.00)
120.00
(960,000.00)
(560,000.00)
(400,000.00)

(959,880.00)

R 120.00
R 400.00

Total Fixed Cost 960,000.00

Marginal income per unit 120.00

Total Fixed Cost 960,000.00

Marginal income per unit 102.00

Break even Quantity * Selling price 3600 units *R82

Marginal income X 100 120.00

Sales (Selling price) 1 400.00

Total Fixed cost 56,000.00

Marginal income ratio 12%

Fixed cost +Target profit 960000+300000

Marginal income per unit 120.00

Target sales volume*Selling price per unit 200000 units *R5

Fixed cost +Target profit 540,000+480,000

Marginal income ratio 40%

Budgeted sales - Break even sales 492000-295200

Budgeted sales units -Bre even sale units 1100-592

Present
Selling price R40
Variable cost per unit R30
Marginal cost per unit R10

Fixed cost 200000

Marginal income per unit 10
 20000
Fixed cost + Target profit (200000+40000) 240000
Marginal income per unit 10
24000

Present
Selling price R40
Variable cost per unit R30
Marginal cost per unit R10
Fixed Cost 200000
Marginal income per unit 10
20000
Fixed cost + Target profit (200000+40000) 240000
R10 10
24000
Present
Selling price R40
Variable cost per unit R30
Marginal cost per unit R10
Fixed Cost 200000
Fixed cost 200000
Marginal income per unit 10
20000
Fixed cost +Target Profit (200000+40000) 240000
Marginal income per unit 10
24000
Sales 380.00 5.2.3
Variable cost (R140+60+40) (240.00)
Sales commission (10%*380) (38.00)
Marginal income (R594 per unit) 102.00
Total Fixed cost (960,000.00)
Fixed Overhead costs (560,000.00)
Fixed Administrative and Marketing cost (400,000.00)

Net profit \ Loss (959,898.00)

Marginal income (R102 per unit) R 102.00

Selling Price R 400.00

5.2.1
8,000.00 Units

5.2.3
9,411.76 9412 Units

3,200,000.00 Rands 8.4.2

10.00
82
12.20% 8.4.1

459,200.00 Rands

1,260,000.00 5.2.2
120.00 10500 Units

1,000,000.00

1020000
0.4 2,550,000.00 510.00

-R 3,199,600.00

(6,900.00) 508 Units 5.1.2

After increase in selling price

R44
R30
R14

200000
14.00
 14,285.71 Units
240000
14
17,142.86 Units

After increase in Variable price

R40
R27
R13
200000
13
15,384.62 Units
240000
13
18,461.54 Units
After increase in Fixed cost
R40
R30
R10
220000
220000
10
22000 Units
260000
10
26000 Units
Rands per unit