MAC3701 Assignment 2 Semester 1 - 2023 (SOLUTIONS)

,QUESTION 1

a. Calculate EDD’s budgeted break-even sales units per product type for the 2022
financial year. Ignore the implications, if any, of opening- and closing inventory.



Break-even in units = Total fixed costs/Contribution per unit

Break even units for Bolt = (17 500 000 + 25 000 000)/61454 = 6 015 742 Units

Break even units for Nerd = (17 500 000 + 25 000 000)/ 5.9308 = 7 165 980 units



CALCULATIONS

Cost per ml of water

Cost per Litter = R2

Cost per ml = R2/1000 = R0.002



Cost caffeine milligram

Cost of 100g = R162

Cost of 1g = R162/100 = R1.62

Cost of mg = R1.62/1000 = R0.00162



Cost of Taurine per mg

Cost of 100g = R175

Cost of 1g = R175/100 = R1.75



Citrus quantity for Blot

, Per 1 litter = 0.2ml

1 unit (250ml) = 0.2/4 = 0.05ml




Citrus quantity for Nerd Per 1 litter = 0.2ml 1 unit (500ml) = 0.2/2 = 0.1ml




Price of Citrus per ml



Per 20 ml = R40



Per 1 ml = R40/20 = R2




Time to manufacture Unit of Bolt 1 litter = 10 minutes 250ml = 10/4 = 2.5 Minutes




Time to manufacture Unit of Nerd 1 litter = 8 minutes 500ml = 8/4 = 2 Minutes




Labour cost in minutes



Hour rate = R30



Minute rate = R30/60 = R0.5




Machine hours per Unit of Bolt 1 Litre = 12 /60 = 0.2 Hours 250ml = 0.2/4 = 0.05 Hours




Machine hours per Unit of Nerd



1 Litre = 12 /60 = 0.2 Hours 500ml = 0.2/2 = 0.1 Hours