Jabu manufactures and sells Product X. During the most recent financial period, he sold 500 units at R750 each. There were no units of Product X in opening or closing inventory. Sales people are pa

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Jabu manufactures and sells Product X.  During the most recent financial period, he sold 500 units at R750 each.  There were no units of Product X in opening or closing inventory.  Sales people are paid a commission of 5% on sales.  The following additional information is available for this sales level:

Fixed administrative cost per unit                                                                  R90.00

Total fixed manufacturing overhead                                                              R120 000

Total fixed marketing cost                                                                              R50 000

Direct material usage per product                                                                  2 kg

Direct material price per kilogram                                                                  R14.50

Total direct labour cost                                                                                   R47 500

Required:

(a)               Compile a marginal income statement to determine the break-even units and break-even value. (10 Marks)

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