Ml!87D2
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ASSIGNMENT
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lliL QUES ll!INS FltJLLYr ANSt WERED
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DUE: 22 APRIL 2D26
DISCLAIMER:
THIS DOCUMENT IS FDR REFERENCE AND GUIDf'NCE PURP SES
DN~Y. I DD NDTtTAKE RESPDNSIBIL!ITY !FDR AN~ PLAGIARl~M. MISUS . DR
ACADEMIC MISCONDUCT RESULTING FROM THSIR USE. IT IS YOUR ---.
RESPDNSIBILITt Ttj ENSU" DRIGINAL~TY lN CDMPL!IAN E WITH
RELEVA T GUIDELINES DR STANDARDS. t ~~
, PLEASE USE THIS DOCUMENT AS A GUIDE ONLY
QUESTION 1
(a) Calculate the expected operating profit for the year ending 31 December 2025 including
theexpected operating profit from the new Nova X9. [Round off to the nearest Rand]
1. Expected Operating Profit (excluding Nova X9)
The expected operating profit, excluding the profits from the sale of Nova X9 soccer boots, is based
on the probabilities provided:
R1,600,000 with a probability of 20%
R1,700,000 with a probability of 30%
R1,800,000 with a probability of 40%
R2,000,000 with a probability of 10%
The expected operating profit for the year (excluding the Nova X9) is calculated as:
Expected Operating Profit (Excluding Nova X9) = (1,600,000×0.20) + (1,700,000×0.30) +
(1,800,000×0.40) + (2,000,000×0.10)
=320,000 + 510,000 + 720,000 + 200,000 =1,750,000
2. Expected Operating Profit from Nova X9
To calculate the expected operating profit from the new Nova X9, we need to follow these steps:
First, determine the expected quantity of Nova X9 boots to be sold:
9,000 pairs with a probability of 30%
12,500 pairs with a probability of 40%
15,000 pairs with a probability of 20%
18,500 pairs with a probability of 10%
The expected quantity of boots to be sold is:
Expected Quantity of Nova X9=(9,000×0.30)+(12,500×0.40)+(15,000×0.20)+(18,500×0.10)
=2,700+5,000+3,000+1,850=12,550 pairs
Revenue per pair = R880
Variable costs per pair:
Direct material: R480
Direct labour: R220
Variable overhead: R55
Total variable costs per pair = 480+220+55=R755
Contribution margin per pair = Selling price per pair - Total variable costs per pair:
Contribution margin per pair=880−755=R125
Fixed costs for Nova X9 = R450,000 per annum
, The expected operating profit from Nova X9 is:
Expected Operating Profit (Nova X9)=(Expected Quantity of Nova X9×Contribution margin per
pair)−Fixed costs =(12,550×125)−450,000
=1,568,750−450,000=1,118,750
3. Total Expected Operating Profit
Now, combine the expected operating profit from the existing business and the new Nova X9:
Total Expected Operating Profit=1,750,000+1,118,750=2,868,750
So, the total expected operating profit for the year ending 31 December 2025 is R2,868,750.
t t t t
ASSIGNMENT
r r r
2 SEMESTER
1 r r
1
...
--+
lliL QUES ll!INS FltJLLYr ANSt WERED
r t
DUE: 22 APRIL 2D26
DISCLAIMER:
THIS DOCUMENT IS FDR REFERENCE AND GUIDf'NCE PURP SES
DN~Y. I DD NDTtTAKE RESPDNSIBIL!ITY !FDR AN~ PLAGIARl~M. MISUS . DR
ACADEMIC MISCONDUCT RESULTING FROM THSIR USE. IT IS YOUR ---.
RESPDNSIBILITt Ttj ENSU" DRIGINAL~TY lN CDMPL!IAN E WITH
RELEVA T GUIDELINES DR STANDARDS. t ~~
, PLEASE USE THIS DOCUMENT AS A GUIDE ONLY
QUESTION 1
(a) Calculate the expected operating profit for the year ending 31 December 2025 including
theexpected operating profit from the new Nova X9. [Round off to the nearest Rand]
1. Expected Operating Profit (excluding Nova X9)
The expected operating profit, excluding the profits from the sale of Nova X9 soccer boots, is based
on the probabilities provided:
R1,600,000 with a probability of 20%
R1,700,000 with a probability of 30%
R1,800,000 with a probability of 40%
R2,000,000 with a probability of 10%
The expected operating profit for the year (excluding the Nova X9) is calculated as:
Expected Operating Profit (Excluding Nova X9) = (1,600,000×0.20) + (1,700,000×0.30) +
(1,800,000×0.40) + (2,000,000×0.10)
=320,000 + 510,000 + 720,000 + 200,000 =1,750,000
2. Expected Operating Profit from Nova X9
To calculate the expected operating profit from the new Nova X9, we need to follow these steps:
First, determine the expected quantity of Nova X9 boots to be sold:
9,000 pairs with a probability of 30%
12,500 pairs with a probability of 40%
15,000 pairs with a probability of 20%
18,500 pairs with a probability of 10%
The expected quantity of boots to be sold is:
Expected Quantity of Nova X9=(9,000×0.30)+(12,500×0.40)+(15,000×0.20)+(18,500×0.10)
=2,700+5,000+3,000+1,850=12,550 pairs
Revenue per pair = R880
Variable costs per pair:
Direct material: R480
Direct labour: R220
Variable overhead: R55
Total variable costs per pair = 480+220+55=R755
Contribution margin per pair = Selling price per pair - Total variable costs per pair:
Contribution margin per pair=880−755=R125
Fixed costs for Nova X9 = R450,000 per annum
, The expected operating profit from Nova X9 is:
Expected Operating Profit (Nova X9)=(Expected Quantity of Nova X9×Contribution margin per
pair)−Fixed costs =(12,550×125)−450,000
=1,568,750−450,000=1,118,750
3. Total Expected Operating Profit
Now, combine the expected operating profit from the existing business and the new Nova X9:
Total Expected Operating Profit=1,750,000+1,118,750=2,868,750
So, the total expected operating profit for the year ending 31 December 2025 is R2,868,750.
