Q.2.2 Differentiate clearly between a controllable cost and an uncontrollable cost, (5) including some examples. (Hint:

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Q 2 2 Differentiate Clearly Between A Controllable Cost And An Uncontrollable Cost 5 Including Some Examples Hint 1 (636.01 KiB) Viewed 23 times

Q.2.2 Differentiate clearly between a controllable cost and an uncontrollable cost, (5) including some examples. (Hint: Do not only give definition but clearly differentiate). The following information applies to Q.2.3-Q.2.5 The budgeted information on two business opportunities that Jill is currently considering investing in is as follows: Opportunity 1 Opportunity 2 Total (R) Per unit (R) Total (R) Per unit (R) Sales 250 25 163 Less: Costs 14.50 Variable direct 63 2.50 manufacturing costs Variable indirect 30 2 manufacturing costs Fixed manufacturing 25 5 overheads Sales commission 10 1.50 Fixed administrative 35 3.50 costs 87 10.50 500 000 326 000 126 000 60 000 50 000 20 000 70 000 174 000 500 000 290 000 50 000 40 000 100 000 30 000 70 000 210 000
Required: Q.2.3 (7) Calculate the break-even point in units for opportunity two. Show your workings. Q.2.4 (4) Calculate the break-even point in sales revenue for both opportunities assuming that opportunity one has a break even point in units of 817 units. Show your workings. Round to the nearest Rand. Q.2.5 Make a recommendation to management on which opportunity to choose. Give (2) reasons. Q.2.6. Tebello has decided to manufacture and sell scented candles in order to supplement her pocket money. Her dad has agreed that she can use the garage at rental of R200 per month. Each candle will use wax of R5 and strings for the wick will amount to R1 per candle. The scent will cost R2 per candle. Sarah will be assisting Tebello with making of the candles and will be paid R5 for every candle that is completed. Equipment will cost R500 per month. Tebello's mom will be selling the candles at work for which she will earn commission of 50cents per candle. Candles are sold at R30 each. 150 candles were sold in the first month of operation.
Q.2.7 Q.2.6.1 Assume that total variable costs per unit is correctly calculated as R13.50 (6) per unit. Calculate the total profit/loss for the first month of operation. Q.2.6.2 Calculate the total labour cost for the first month of operation. (1) (5) Although costs are usually classified as being either fixed or variable, there are identifiable cases where this distinction is not that clear-cut. Explain what is meant by semi-fixed costs. Include an example as part of your explanation.