Rent R15000 Water and electricity R6000 Salaries and wages R55000 Telephone R3500 Postage R1500 Printing and stationary R3000 Advertising R8000 Vehicle lease R12000 Petrol R7000 Maintenance R6500 Machinery lease R17000 Packaging R4000 The information above lists the total costs of tge company. The company manufactures machinery components. The vehicles and machinery, which aed used for the manufacture of the components, have been financed by a bank on lease agreement. The total monthly costs or expenses of the company are R138500. Total sales per month R167500 First question Use any method to find the breakeven point for this business as accurately as possible. In other words find how much must he make in sales to cover his costs. Question 2 It is an accepted business principle that variable costs always form a fixed fraction of sales. Calculate the fraction
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1 Answer

Total of all monthly costs = 15000 + 6000 + 55000 + 3500 + 1500 + 3000 + 8000 + 12000 + 7000 + 6500 + 17000 + 4000 = 138500 (confirmed in the question).

Total sales per month = R167500.

Total lease per month = 12000 + 17000 (vehicle and machinery) = R29000 covered by the bank and assumed to be a fixed monthly cost.

138500-29000=R109500 are the variable monthly costs/expenses, so sales need to be a minimum of R109500 to break even. R109500 is 109500/167500 or 65.37% of sales.

 

by Top Rated User (1.2m points)
I'm guessing it's 219/335, but I'm not sure.

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