T UTORING FOR FAC,MAC,ECS,STA,DSC,TAX, FIN ,INV,QMI,
BNU,MNG,MNB,BSM, CLA
whatsapp me on+27737560989
EMAIL:
PART A: Margin of Safety and Risk Evaluation
(A-a) Budgeted Margin of Safety
Step 1: Calculate Budgeted Variable Costs per Vehicle
Cost Component Urban (R) Explorer (R) Working/Note
Urban: 500 kg x
Vehicle body 125 000 187 500 R250/kg. Explorer: 750
kg x R250/kg
, Pack capacity = 4 cells x
5kWh = 20kWh/pack.
Lithium-ion battery 90 000 135 000
Cost = R30 000/20kWh =
R1 500/kWh
Electronic systems 40 000 50 000 Given
Urban: 1 set x R20 000.
Other direct
20 000 30 000 Explorer: 1.5 sets x R20
materials
000
Urban: (2 400 mins/60) x
Direct labour 12 000 18 000 R300. Explorer: (3 600
mins/60) x R300
Variable MO 35 000 52 000 Given
4% of respective Selling
Variable S&D 18 000 28 000
Price
Total Variable Cost 340 000 500 500
Step 2: Calculate Budgeted Contribution Margin per Vehicle
Description Urban (R) Explorer (R)
Selling Price 450 000 700 000
Less: Total Variable
(340 000) (500 500)
Cost
Contribution per
110 000 199 500
Unit
Step 3: Calculate
Budgeted Total
Fixed Costs
Description Calculation Amount
, Fixed Manufacturing Budgeted production (300 + 200 = 500
R62 500 000
Overheads (FMO) vehicles) × R125 000 absorption rate
Total S&D (R28 110 000) − Total
Fixed Selling &
Variable S&D [(300 × R18 000) + (200 ×
Distribution (S&D)
R28 000)]
= R28 110 000 − R11 000 000 R17 110 000
Total Fixed Costs R62 500 000 + R17 110 000 R79 610 000
Step 4: Calculate
Break-Even Point
(BEP) and Margin of
Safety
Description Calculation Amount
Urban = 300/500 (60%); Explorer =
Budgeted Sales Mix 60% / 40%
200/500 (40%)
Weighted Average
Contribution Margin (R110 000 × 0.60) + (R199 500 × 0.40)
(WACM)
= R66 000 + R79 800 R145 800
BNU,MNG,MNB,BSM, CLA
whatsapp me on+27737560989
EMAIL:
PART A: Margin of Safety and Risk Evaluation
(A-a) Budgeted Margin of Safety
Step 1: Calculate Budgeted Variable Costs per Vehicle
Cost Component Urban (R) Explorer (R) Working/Note
Urban: 500 kg x
Vehicle body 125 000 187 500 R250/kg. Explorer: 750
kg x R250/kg
, Pack capacity = 4 cells x
5kWh = 20kWh/pack.
Lithium-ion battery 90 000 135 000
Cost = R30 000/20kWh =
R1 500/kWh
Electronic systems 40 000 50 000 Given
Urban: 1 set x R20 000.
Other direct
20 000 30 000 Explorer: 1.5 sets x R20
materials
000
Urban: (2 400 mins/60) x
Direct labour 12 000 18 000 R300. Explorer: (3 600
mins/60) x R300
Variable MO 35 000 52 000 Given
4% of respective Selling
Variable S&D 18 000 28 000
Price
Total Variable Cost 340 000 500 500
Step 2: Calculate Budgeted Contribution Margin per Vehicle
Description Urban (R) Explorer (R)
Selling Price 450 000 700 000
Less: Total Variable
(340 000) (500 500)
Cost
Contribution per
110 000 199 500
Unit
Step 3: Calculate
Budgeted Total
Fixed Costs
Description Calculation Amount
, Fixed Manufacturing Budgeted production (300 + 200 = 500
R62 500 000
Overheads (FMO) vehicles) × R125 000 absorption rate
Total S&D (R28 110 000) − Total
Fixed Selling &
Variable S&D [(300 × R18 000) + (200 ×
Distribution (S&D)
R28 000)]
= R28 110 000 − R11 000 000 R17 110 000
Total Fixed Costs R62 500 000 + R17 110 000 R79 610 000
Step 4: Calculate
Break-Even Point
(BEP) and Margin of
Safety
Description Calculation Amount
Urban = 300/500 (60%); Explorer =
Budgeted Sales Mix 60% / 40%
200/500 (40%)
Weighted Average
Contribution Margin (R110 000 × 0.60) + (R199 500 × 0.40)
(WACM)
= R66 000 + R79 800 R145 800
