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Tutorial Question 4 - Week 6 - CVP Analysis

The document presents a tutorial question involving financial calculations for Naidoo (Pty) Ltd and Multi Vit Ltd. It requires calculating budgeted profit, break-even points, and adjustments for cost increases for Naidoo (Pty) Ltd, and break-even values for different products for Multi Vit Ltd. The calculations are based on provided sales, costs, and proportions for each company.

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Nonkazimulo Nxele
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31 views1 page

Tutorial Question 4 - Week 6 - CVP Analysis

The document presents a tutorial question involving financial calculations for Naidoo (Pty) Ltd and Multi Vit Ltd. It requires calculating budgeted profit, break-even points, and adjustments for cost increases for Naidoo (Pty) Ltd, and break-even values for different products for Multi Vit Ltd. The calculations are based on provided sales, costs, and proportions for each company.

Uploaded by

Nonkazimulo Nxele
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Tutorial Question 4 - Week 6:

Question 1:
Naidoo (Pty) Ltd manufactures and sells only one product. The budgeted details for 20.7
are as follows:
Sales 150 000 per month
Selling price per unit R3
Variable cost per unit R1,40
Total fixed cost R1 350 000

Required
1. Calculate the budgeted profit for 20.7.
2. Calculate the break-even quantity and value.
3 Suppose Naidoo (Pty) Ltd wants to make provision for a 10% increase in fixed costs and an
increase in variable costs by R0,20 per unit.
Taking these increases into account, calculate the following:
3.1 New break-even quantity and value
3.2 Safety margin (in terms of value)
3.3 The number of units that need to be sold to earn a net profit of R400 000

Question 2:
Multi Vit Ltd has the following sales mix (fixed costs amount to R300 000):
Product Sales Variable cost Proportion
Vit A R600 000 R300 000 50%
Vit B R300 000 R150 000 30%
Vit C R100 000 R150 000 20%
R1 000 000 R600 000 100%

Required
1. Calculate the total break-even value, using the marginal income ratio method.
2. Calculate the break-even value for each product, using the marginal income ratio method.
(Assume that the selling price per unit of each product is the same.)

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