Maureen is currently looking into a business opportunity that will require her to manufacture branded match T-shirts for a local cricket club. Although she thinks it might be a good opportunity, she is a bit wary of accepting the contract as her free time is limited and she will only be able to produce 100 T-shirts per month. T-shirts will be sold at R200 each to club members. pendent institute of tducation Pty ud 2020 The costs associated with the opportunity are as follows Description Costs Cost of material for T-shirt R40 per shirt Cost of printing RS per shirt Labour costs R25 per shirt Variable overhead costs R10 per shirt Fixed overhead costs RIS 000 per month Required: Calculate the break even point in units and advise Maureen whether she should take up the opportunity or not Provide a reason for your answer.
Maureen is currently looking into a business opportunity that will require her to manufacture branded match T-shirts for a local cricket club. Although she thinks it might be a good opportunity, she is a bit wary of accepting the contract as her free time is limited and she will only be able to produce 100 T-shirts per month. T-shirts will be sold at R200 each to club members. pendent institute of tducation Pty ud 2020 The costs associated with the opportunity are as follows Description Costs Cost of material for T-shirt R40 per shirt Cost of printing RS per shirt Labour costs R25 per shirt Variable overhead costs R10 per shirt Fixed overhead costs RIS 000 per month Required: Calculate the break even point in units and advise Maureen whether she should take up the opportunity or not Provide a reason for your answer.
Chapter9: Deductions: Employee And Self-employed-related Expenses
Section: Chapter Questions
Problem 42P
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Transcribed Image Text:Maureen is currently looking into a business opportunity that will require her to
manufacture branded match T-shirts for a local cricket club. Although she thinks it
might be a good opportunity, she is a bit wary of accepting the contract as her free
time is limited and she will only be able to produce 100 T-shirts per month.
T-shirts will be sold at R200 each to club members.
pendent institute of tducation Pty ud 2020
The costs associated with the opportunity are as follows
Description
Costs
Cost of material for T-shirt
R40 per shirt
Cost of printing
RS per shirt
Labour costs
R25 per shirt
Variable overhead costs
R10 per shirt
Fixed overhead costs
RIS 000 per month
Required:
Calculate the break even point in units and advise Maureen whether she should
take up the opportunity or not Provide a reason for your answer.
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