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QUESTION 3 (20 Marks) 3. ABC Enterprises produces a single product. The following information for...

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QUESTION 3 (20 Marks) 3. ABC Enterprises produces a single product. The following information for 2018 is available R80 000 R14 R33 Fixed manufacturing costs Variable manufacturing costs per unit Selling price per unit Marketing costs Advertising Sales personnel's salaries and commission Administration costs: Salaries Other office costs The number of units produced and sold was 15 000. R4 000 per month R5 000 per month plus 6% of sales R12 000 per month R4 000 per month plus R2 per unit sold 3.1 Required Calculate the break-even quantity for 2019. (Round off your answer to the nearest rand.) (4 marks) 3.2 Suppose ABC Enterprises is considering a R3 per unit decrease in the selling price of the product with the expectation that this would increase sales volume by 8%. Is this a good idea? Motivate your answer with the relevant calculations. (12 marks) 3.3 Calculate the new break-even quantity supposing that ABC Enterprises decides to go ahead with the proposal from 3.2 above. (4 marks)

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