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3.2 Calculate the margin of safety (as a percentage) for 2024 (6 marks) 3.3 Use the contribution margin ratio to calculate the sales value required to achieve an operating profit of R1 200 000. . (7marks) 3.4 Suppose Callmore Enterprises is considering a R6 per unit decrease in the selling price of the product with the expectation that this would increase the sales volume by 10%. Is this a good idea? Motivate your answer with the relevant calculations

Question 3 (25marks) Call Enterprises produces a single product. The following budgeted information for 2024 financial year is available: \begin{tabular}{|l|l|} \hline Annual fixed manufacturing costs & R300 000 \\ \hline Variable manufacturing cost per unit & R26 \\ \hline Selling price per unit & R100 \\ \hline Marketing costs & \\ \hline Advertising & R16 000 per month \\ \hline Sales personnel's salaries and commission & R20 000 per month plus 6\% sales \\ \hline Administration costs: & \\ \hline Salaries & R48 000 per month \\ \hline Other office costs & R16 000 per month plus R8 unit sold \\ \hline \end{tabular} The number of units expected to be produced and sold during 2024 is 30000 Answer each of the following questions independently. 3.1 Calculate the total contribution margin and operating profit (loss) if all 30000 units are sold. (5 marks) 3.2 Calculate the margin of safety (as a percentage) for 2024 (6 marks) 3.3 Use the contribution margin ratio to calculate the sales value required to achieve an operating profit of R1 200000 . (7marks) 3.4 Suppose Callmore Enterprises is considering a R6 per unit decrease in the selling price of the product with the expectation that (7marks) this would increase the sales volume by 10%. Is this a good idea? Motivate your answer with the relevant calculations|

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