Jabu manufactures and sells Product X. During the most recent financial period, he sold 500 units at R750 each. There were no units of Product X in opening or closing inventory. Sales people are paid a commission of 5% on sales. The following additional information is available for this sales level:
Fixed administrative cost per unit R90.00
Total fixed manufacturing overhead R120 000
Total fixed marketing cost R50 000
Direct material usage per product 2 kg
Direct material price per kilogram R14.50
Total direct labour cost R47 500
Required:
(a) Compile a marginal income statement to determine the break-even units and break-even value. (10 Marks)
