Mr Zuma markets two models of cellular phones, the master X and master Z. the cost price of the master X and master Z are R1080 and R 2550 respectively. he sells the master X for R2400 and master Z for R3400. the master X and master Z amount to 70%and 30% of the total sales respectively. the operating expenses of mr zuma amount to R7840 per month.
3.1.1. determine the gross profit for each cellular phone.
selling price of master X and master Z
cost price of master X and master Z
gross profit of master X and master Z
3.1.2.calculate the gross profit percentage for each cellular phone.
gross profit%
master X
GP/SP*100/1
master Z
GP/SP*100/1
3.1.3.calculate the weighted average gross profit percentage
master X
% of sales
gross profit%
weighed GP%
master Z
%of sales
gross of profit%
weighted GP% average
3.1.4.what is the break-even turnover rand value per month?
break-even turnover=operating expenses/GP%
3.1.5.if Mr Zuma requires a net profit of R 12 000 per month, what should the turnover rand value be per month?
profit target turnover rand value=operating expenses + profit required/GP%
3.1.6.using your calculation answer the following question
suppose the actual sales/turnover rand value for the month amounts to R35000is Mr Zuma making a profit? motivate your answer.
3.1.1.
Selling price of master X = R2400
Cost price of master X = R1080
Gross profit of master X = R2400 - R1080 = R1320
Selling price of master Z = R3400
Cost price of master Z = R2550
Gross profit of master Z = R3400 - R2550 = R850
3.1.2.
Gross profit percentage for master X = (1320/2400) * 100% = 55%
Gross profit percentage for master Z = (850/3400) * 100% = 25%
3.1.3.
Weighted average gross profit percentage:
Master X:
% of sales = 70%
Gross profit% = 55%
Weighted GP% = 0.70 * 55 = 38.5%
Master Z:
% of sales = 30%
Gross profit% = 25%
Weighted GP% = 0.30 * 25 = 7.5%
Weighted average gross profit percentage = 38.5% + 7.5% = 46%
3.1.4.
Break-even turnover rand value per month = R7840 / 46% = R17043.48
3.1.5.
Profit target turnover rand value per month = (R7840 + R12000) / 46% = R25043.48
3.1.6.
If the actual sales/turnover rand value for the month is R35000, we can calculate the actual profit:
Gross profit = R35000 * 46% = R16100
Operating expenses = R7840
Net profit = Gross profit - Operating expenses = R16100 - R7840 = R8260
Since the net profit is less than the required net profit of R12000, Mr. Zuma is not making a profit and is falling short of his target.