Lavilo, a sunglass manufacturer, have the following list of monthly costs in their company: Fixed Costs Variable Costs 1

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Lavilo A Sunglass Manufacturer Have The Following List Of Monthly Costs In Their Company Fixed Costs Variable Costs 1 1 (33.4 KiB) Viewed 60 times

Lavilo A Sunglass Manufacturer Have The Following List Of Monthly Costs In Their Company Fixed Costs Variable Costs 1 2 (43.12 KiB) Viewed 60 times

Lavilo, a sunglass manufacturer, have the following list of monthly costs in their company: Fixed Costs Variable Costs 1. 2 2. Lightweight plastic purchased for R100 per frame manufactured. Indirect materials used purchased for R20 per frame manufactured. Lens material purchased for R250 per frame manufactured. 3. 3. 4. 5. 6. Wages of machine operators is R2 500 per operator per week. There are 40 operators on duty at all times. Salaries of factory management: R80 000 per month Depreciation of machinery: R30 000 per month Marketing: R25 000 per month Sales commission per frame sold: R50 Administrative staff and top management salaries: R600 000 per month 7. 8. 9.
10. 11. General office expenses: R10 000 per month Import taxes and custom duties (on material): R500 per 100 frames manufactured Carriage on purchases of material: R200 per 100 frames manufactured 12. Total . Additional information: 2 200 frames are manufactured per month; 2 000 frames are being sold per month Currently they sell their sunglasses for R750 per frame; There are four weeks in a month. Required: Q.2.1 Complete the above table by calculating the costs per month, and splitting the (14) costs between fixed costs and variable costs. In your answer book, add columns for fixed costs and variable costs, and write your answer next to the applicable number and in the applicable column. Q.2.2 Calculate the variable cost (Marginal Cost) per frame. (7) Q.2.3 Calculate the break-even point in units for Lavilo. (3) Q.2.4 If Lavilo sell their frames for R100 more, what will the break-even point be? (3) Q.2.5 3 (3) Besides increasing the selling price, what else can Lavilo do to improve their Contribution Margin (Marginal Income)?