Question 3 30 marks Travel On Inc. sells luggage. They sell a duffle bag, a carry-on...

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Accounting

Question 3 30 marks Travel On Inc. sells luggage. They sell aduffle bag, a carry-on suitcase and a deluxe suitcase. The priceand variable cost for each type of luggage is listed below. PriceVariable Cost Duffle bag R100 R 25 Carry-on 180 40 Deluxe 300 120The total fixed costs for Travel On Inc. equals R60,000. For every8 duffle bags. Travel On Inc sells it sells 3 carry-on suitcasesand 1 deluxe suitcase. PBA4807 - Accounting for managers Page 15 of16 © UNISA Graduate School of Business Leadership Required: 1.)Calculate the package contribution margin. 2.) Calculate thebreak-even point in units for duffle bags, carry-on suitcases anddeluxe suitcases. 3.) If Travel On Inc. has a target income for thecoming year of R300,000, how many packages will the company have tosell? 4.) Based on your answer in Part C, prepare a contributionmargin income statement for the coming year. 5.) What is thecompany’s margin of safety in packages?

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Contribution Margin The difference between the selling price and variable cost is considered as the contribution margin of the product Breakeven Point It is the point where neither profit is earned nor any loss incurred In other words the unit in sales or sales in amount where the total expense is equal to selling price of the product 1 Computation of contribution margin Contribution margin per unit Selling price per See Answer

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