CBCB011
Concept Test 5: Break-even Analysis
Surname, Initials, and Student No.:
……………………………………………………………………………………………
Sony Limited manufactures TV games with smartphone features. They have been in
business for five years and now have four branches across South Africa.
After making a healthy profit in the current financial year and R106 000 in the previous
financial year, the board of directors is considering opening a new branch in
Polokwane.
The following information relates to the cost and revenue for the year ended March
2026:
Sales
R300 000
Fixed Production costs
R53 500
Variable Production costs
R37 200
Fixed Selling and Admin expenses
R46 500
Variable Selling and Admin expenses
R28 800
300 TV games were sold during the 2026 financial year.
The company tax rate in South Africa is 27%.
1. Calculate the following for Sony Limited:
i.
Break-even units [7]
53500+44500=100000
300000/300=1000
(37200+28800)/300=220
BEP=100000/(1000-220)
=128,21 units
CBCB011
ii.
Break-even sales value. [3]
BES
iii.
=128,21*R1000
=R128205,13
Margin of safety units and margin of safety value. [2]
(300-128,21)/300=0,5726*100
=R171790
CM=57,26%
iv.
MSV=300000*57,26%
Break-even units if the variable costs increase by R80. [2]
BEP=100000/(1000-300)
=333.33units
v.
The sales value if Sony Limited wants to make a net profit after tax of
R64 800. [6]
NPBT= 64800/(1-27%)
=88767,12
TP=(300000+88767,12)/(1000-220)
=498,42 units
SV=498,42*1000
=R498419